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Gardner Denver Holdings, Inc.: Initiation of Research Coverage

Tuesday, June 6, 2017

William Blair & Company initiated research coverage of Gardner Denver Holdings, Inc. (GDI $22.65), an industrial company that designs, manufactures, and markets flow control and compression equipment and associated aftermarket parts for use in general industrial, energy, and medical applications.

Analyst Brian Drab estimated the company will generate adjusted earnings per share of $1.11 in 2017 and $1.29 in 2018.

“Gardner Denver has been establishing its reputation as a premier provider of compression and flow control equipment for over a century,” Drab said, “and holds a top-three share position in each of its primary end-markets. The company’s long history of dependability is a key competitive advantage given the mission-critical applications the equipment is often used in. Over the last few years, Gardner Denver has undergone a major transformation resulting in a company with a largely new management team and all three business segments generating greater than 20% EBITDA margin. After a revenue decline of about 70% from the peak, the company’s upstream energy business has begun to rebound, with orders up nearly 500% in first quarter 2017. Although Gardner Denver’s organic revenue growth rate has historically been in the low single digits, we expect acceleration in the energy business to drive the overall company organic revenue growth rate up to the low double digits in the near term.”

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Outperform (Buy): 59%
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