Jefferies analyst Stephen Volkmann raised the firm’s price target on Gates Industrial (GTES) to $26 from $23 and keeps a Buy rating on the shares as part of a broader research note previewing 2025 for the Machinery and Industrial sector. Approaching 2025, the landscape has changed as the markets have turned more bullish on industrial trends and with valuations near the high end of historical highs, the firm has to be “increasingly selective”, Jefferies states. Gates Industrial is a “compelling self-help story” offering significant margin upside that is largely independent of volume, and with EBITDA margins already in the low 20s percent, the company should have upside to mid 20s while its strong free cash flow facilitates debt paydown and share repurchase, the firm added.
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