Gates Industrial Q1 adjusted EPS beats expectations

Overview

• US fluid power and power transmission supplier's Q1 sales rose 0.4% but missed analyst expectations

• Adjusted EPS for Q1 beat analyst expectations

• Company reiterated 2026 full-year guidance despite a 2.9% core revenue decline

Outlook

• Gates Industrial maintains 2026 core sales growth guidance of 1% to 4% year-over-year

• Company expects 2026 adjusted EBITDA of $775 mln to $835 mln

• Gates Industrial sees 2026 adjusted EPS of $1.52 to $1.68

Result Drivers

• ERP SYSTEM IMPLEMENTATION - Co said it successfully implemented a new enterprise resource planning system in Europe during the qtr

• ONGOING INVESTMENTS - Co continued to invest in strategic process and growth initiatives, per CEO Ivo Jurek

• ORDER RATES - Co exited the qtr with solid order rates and a book to bill nicely above 1, according to CEO Ivo Jurek

Company press release: ID:nPn32DHY7a

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 3 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

• Wall Street's median 12-month price target for Gates Industrial Corporation PLC is $31.00, about 21% above its April 30 closing price of $25.61

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 14 three months ago

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