MOD: Data Center Expansion Will Support AI Demand While Shares Appear Balanced

Analysts have modestly raised their price target on Modine Manufacturing to approximately 183 dollars, reflecting slightly higher projected revenue growth and a marginally richer future price to earnings multiple, despite only minimal changes to profit margin assumptions and discount rate inputs.

What's in the News

• Opened a new 155,000 square foot data center cooling manufacturing facility in Franklin, Wisconsin, as part of a multiyear 100 million dollar expansion, with plans for more than 300 new jobs by March 2026 and about 430 employees within three years (Key Developments).
• Confirmed that the broader 100 million dollar investment will also fund a new facility in Grand Prairie, Texas, and expansions in Grenada, Mississippi, and Jefferson City, Missouri, to support growing AI and cloud data center demand (Key Developments).
• Raised fiscal 2026 guidance, now expecting net sales growth between 15 percent and 20 percent, up from the prior 10 percent to 15 percent outlook (Key Developments).
• Launched a hiring push for dozens of roles at the Franklin plant, including production assemblers, welders, engineers and leadership positions, targeting approximately 300 employees at the site by March 2026 (Key Developments).
• Completed repurchases of 230,000 shares for 18.4 million dollars under the buyback program announced March 7, 2025, with no shares repurchased in the July to September 2025 tranche (Key Developments).

Valuation Changes

• Fair Value Estimate is essentially unchanged at approximately 183 dollars per share, indicating no material shift in the intrinsic value assessment.
• The Discount Rate has risen slightly from about 8.42 percent to roughly 8.52 percent, reflecting a modest increase in the perceived risk or required return.
• Revenue Growth has increased marginally from around 18.09 percent to approximately 18.10 percent, signaling a very small upward revision in long term growth expectations.
• The Net Profit Margin has edged down slightly from about 11.69 percent to roughly 11.69 percent, a negligible reduction that does not meaningfully alter the earnings outlook.
• Future P/E has risen slightly from roughly 23.46 times to about 23.53 times, implying a modestly richer valuation multiple applied to forward earnings.