UBS Reiterates Buy Rating on Vertiv (VRT) Following Strong Q1 Results

UBS analyst Amit Mehrotra reiterated a Buy rating and $370.00 price target on Vertiv (NYSE: VRT).

The analyst commented, "VRT reported strong 1Q results and raised full year EPS guidance to $6.35 at the midpoint, which is 4% ahead of consensus. The upward revision to full year guidance includes 2% higher organic sales and an 80bp increase in adjusted operating margin. This implies a higher 32% incremental margin in the guide vs prior 28%, reflecting progress on margin improvement along with a higher growth trajectory. However, 2Q EPS guide of $1.40 at midpoint appears slightly below $1.43 consensus, which we believe could include some initial conservatism from management. Looking at 1Q, operating results came in 10% ahead of consensus driven largely by better margins while total revenue was slightly ahead too. We note organic sales growth modestly missed vs high expectations in 1Q, which we believe is more a reflection of timing than anything else. Headline EPS also had 7c benefits from a lower tax rate in 1Q. Overall, these are very strong results and we would expect consensus forecasts to meaningfully increase after today’s results. However, we would expect muted stock reactions considering elevated expectations following more than 90% year-to-date stock increase."

For an analyst ratings summary and ratings history on Vertiv click here. For more ratings news on Vertiv click here.

Shares of Vertiv closed at $305.14 yesterday.

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