Update shared on 28 Nov 2025
Fair value Decreased 2.82%Analysts have adjusted their price target for Gates Industrial downward from $28.82 to $28.01. They cite industry-wide slow growth trends and a shifting preference toward machinery stocks as key factors in their updated outlook.
Analyst Commentary
Recent research coverage has offered a nuanced view of Gates Industrial, with both opportunities and headwinds identified by analysts evaluating the company's prospects and valuation.
Bullish Takeaways- Bullish analysts note a favorable supply setup within the broader machinery industry. This could provide supportive tailwinds if market trends shift.
- The company benefits from being included among a select group of recently initiated industrial stocks. This suggests a baseline confidence in execution and operational stability.
- Its equal weight ratings indicate alignment with industry performance expectations. These ratings are underpinned by steady fundamentals in the near term.
- Gates Industrial's established presence across industrial and environmental services is viewed as a strength in an otherwise slow-growth environment.
- Bearish analysts remain cautious due to a persistent slow-growth backdrop impacting the industrial sector. This environment is seen as limiting upside potential for Gates Industrial.
- There is a noted preference among analysts for construction machinery stocks over engineering services. This could potentially reduce investor interest in Gates Industrial by comparison.
- Recent downward price target revisions signal tempered expectations for share price appreciation in the coming quarters.
- Concerns remain about Gates Industrial's ability to outperform peers until clearer growth catalysts emerge in its core market segments.
What's in the News
- Gates Corporation has launched Data Master Eco, a next-generation, halogen-free liquid cooling solution designed for hyperscale data centers and AI-enabling environments. The new manufacturing process reduces energy use by approximately 75%. (Company Announcement)
- The company announced a share repurchase program authorizing the repurchase of up to $300 million worth of shares. This program is valid through December 2026. (Company Filing)
- Gates Industrial completed the repurchase of 8,212,114 shares, representing 3.15% of outstanding shares, with a total value of $137.93 million as part of its ongoing buyback program. (Company Filing)
- The Board of Directors has authorized a new buyback plan, which is set for October 29, 2025. (Company Filing)
- Updated 2025 earnings guidance reflects a reduction in the core revenue growth midpoint to 1%. The range has been narrowed to 0.5% to 1.5% due to current macroeconomic conditions. (Corporate Guidance)
Valuation Changes
- Consensus Analyst Price Target: Reduced from $28.82 to $28.01. This reflects a marginal decrease in fair value assessments.
- Discount Rate: Increased slightly from 9.36% to 9.43%. This indicates a modest rise in the risk premium applied to future cash flows.
- Revenue Growth: Declined marginally from 3.30% to 3.27%. This signals a slightly more cautious outlook for top-line expansion.
- Net Profit Margin: Improved from 8.86% to 9.07%. This suggests expectations for stronger profitability despite slower growth.
- Future P/E: Decreased from 30.17x to 28.71x. This reflects a more conservative valuation multiple for forward earnings.
Disclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.