Nordson Could Scale to Fresh Record High on Strong Q3 Earnings; Target Price $265

The Westlake, Ohio-based medical device manufacturer Nordson is expected to report its fiscal third-quarter earnings of $2.07 per share, which represents year-over-year growth of over 45% from $1.42 per share seen in the same period a year ago.

The maker of adhesives and industrial coatings would post revenue growth of about 12% to $600 million. Nordson will report 3Q FY21 earnings on Monday, August 30th. It is important to note that the company beat consensus expectations for EPS four times in a row.

Nordson shares have gained over 16% so far this year. The stock hit an all-time high of $235.78 on Friday, trading 0.72% higher.

Analyst Comments

“We are tactically constructive into Nordson’s (NDSN) 3Q21 earnings release next week, as we see the likelihood for a 3Q21 beat and full-year guidance raise. Additionally, we think NDSN’s favourable exposure to electronic components shortages (more an upside opportunity than downside risk) is differentiated,” noted Connor Lynagh, equity analyst at Morgan Stanley.

“We are making moderate revisions to our prior estimates, largely reflecting our incrementally positive outlook on NDSN’s end-markets. The impact on our long-term estimates is limited, with FY21 EBITDA only ~3% higher. Near-term, we have raised our 3Q consolidated revenue growth by ~400bps, with ATS ~700bps higher. Consequently, 3Q revenue is ~3% above prior, with EBITDA ~5% higher as well.”

Nordson Stock Price Forecast

Two analysts who offered stock ratings for Nordson in the last three months forecast the average price in 12 months of $265.50 with a high forecast of $276.00 and a low forecast of $255.00.

The average price target represents a 13.14% change from the last price of $234.66. All those two analysts rated “Buy”, none rated “Hold” or “Sell”, according to Tipranks.

Morgan Stanley gave the base target price of $230 with a high of $260 under a bull scenario and $160 under the worst-case scenario. The firm gave an “Equal-weight” rating on the company’s stock.

Several other analysts have also updated their stock outlook. D.A. Davidson raised the target price raised to $255 from $250. Berenberg lifted the target price to $275 from $265. Wells Fargo upped the price target to $245 from $230.

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