ATKR - Embedded Expectations Analysis - 2022 01 06
Atkore Inc. (ATKR) currently trades below corporate but above historical averages relative to Uniform earnings, with a 14.3x Uniform P/E (Fwd. V/E').At these levels, markets are pricing in expectations for Uniform ROA to compress to 20%, accompanied by 5% Uniform asset growth.
Meanwhile, analysts expect Uniform ROA to expand to 30% by 2022, with much stronger 32% Uniform asset growth.
Given the firm's portfolio of best-in-class patented products, strong acquisition strategy, and IoT tailwinds, there is fundamental potential for stronger-than-priced-in performance.
If the company can capitalize on its tailwinds and initiatives, it could drive Uniform ROA to 29% with 13% Uniform asset growth going forward, which would imply a stock price closer to $224, representing significant potential equity upside.
Moreover, the firm's most recent earnings call suggests management is excited about MC Glide and confident about pricing trends and the PVC conduit business.
Atkore International Group is a holding company. Through its subsidiaries, the company is engaged as a manufacturer of Electrical Raceway products primarily for the non-residential construction and renovation markets and Mechanical Products and Solutions (MP&S) for the construction and industrial markets. The company's segments are: Electrical Raceway, which ufactures products that deploy, isolate and protect a structure's electrical circuitry from the original power source to the final outlet; and MP&S, which provides products and services that frame, support and secure component parts in a range of structures, equipment and systems in electrical, industrial and construction applications.
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