Canada's Hammond Power Solutions Q4 sales beat estimates, driven by strong US demand

Overview

• Canada transformer maker's Q4 sales rose 22%, beating analyst expectations

• Q4 adjusted EPS of C$1.98 beat analyst expectations

• Company backlog rose 122% yr/yr

Outlook

• Company says backlog at Dec 31, 2025 provides meaningful revenue visibility entering 2026

• Hammond Power expects expanded capacity to support efficient conversion of demand in 2026

Result Drivers

• U.S. AND CUSTOM SOLUTIONS - Q4 sales growth driven by strong demand in US & Mexico

• MARGIN PRESSURE - Gross margin declined due to unabsorbed overhead costs from a new factory, higher material costs, and tariffs

Company press release: ID:nGNXbTrCk

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 4 "strong buy" or "buy", no "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the heavy electrical equipment peer group is "buy"

• Wall Street's median 12-month price target for Hammond Power Solutions Inc is C$231.50, about 24.8% above its March 18 closing price of C$185.44

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 22 three months ago

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