Market Concerns Overblown: JP Morgan Analyst Upgrades Hubbell to Strong Buy

JP Morgan's Stephen Tusa upgraded their rating on Hubbell (NYSE: HUBB) from Hold to Strong Buy on 2023/11/17. The analyst also raised their price target by 0.6% from $333 to $335.

According to Tusa's analysis, market concerns on the Utility segment "appear overdone," as indicated by the channel checks conducted at the annual EEI conference. Tusa informed investors that the recent Systems Control acquisition is not the sole reason for JP Morgan's higher-than-consensus estimates for FY 2024 and FY 2025. The analyst pointed to a "stronger organic outlook at the Utility Solutions segment" as another contributing factor.

JP Morgan now has increased confidence in Hubbell and believes that the longer-term mid-single-digit growth target for its Utility Solutions business may be "too conservative," according to Tusa. Moreover, Tusa concluded that Hubbell presents a "relatively visible GARP (Growth At a Reasonable Price) story," considering the stock is trading below its historical average parity multiple.

The latest analyst rating on Hubbell is in alignment with 75% of top-rated analysts who currently rate the stock as either Strong Buy or Buy. Meanwhile, 25% of analysts see Hubbell as a Hold, and no analysts recommend or strongly recommend selling the stock.

The consensus forecast among analysts is that Hubbell's upcoming year will deliver earnings per share (EPS) of $12.21. If the analysts' predictions hold true, Hubbell's next yearly EPS will experience a 5.4% decrease on a year-over-year basis.

Since its last quarterly report on September 30, 2023, Hubbell's stock price has declined by 7.6%. However, when considering the year-over-year performance, the stock has shown a positive growth of 16.8%. Notably, Hubbell has outpaced the S&P 500 during this period, which has seen a 14% increase.

Stephen Tusa, the JP Morgan analyst responsible for the rating upgrade, is ranked in the top 15% of Wall Street analysts by WallStreetZen. With an average return of 5.2% and a win rate of 56.9%, Tusa specializes in analyzing the Basic Materials and Technology sectors, among others.

Hubbell Incorporated, founded in 1888 and headquartered in Shelton, CT, is a manufacturer of electrical and electronic products for non-residential and residential construction, industrial, and utility applications. The company operates manufacturing facilities in both the United States and international locations.

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