The Long View: ESAB

研报英文原文证据摘录

The Long View: ESAB

at ~65%. PREV 1.45 1.45 1.59 5.80

EMEA/APAC Update. ESAB's EMEA/APAC segment sales declined modestly in 1Q26 as strength

in Europe and India was offset by MidEast disruptions. While this likely continued to pressure 2Q

results (factored into expectations), recent news of a potential resolution is an encouraging tailwind

to volumes in late 2026 and into 2027. We have not yet factored this into our outlook, which would

provide upside vs. consensus, in our view.

ESAB is well positioned for ME rebuild, and larger automation orders are on track to ship in 2H. ME

pressures weighed heavily on segment performance in 1Q with negative price/cost from freight

and commodity inflation. Management implemented surcharges and pricing actions, targeting

~150bps of segment price this year, though some price/cost catch-up may persist into 2Q26.

Where We Stand. We maintain our Buy and PT of $125, reflecting a 13.5x multiple on our 2027E adj.

EBITDA (vs. recent range of 10-17x, mid: 13.5x). While ESAB will likely lower 2026 EPS guidance to

reflect Eddyfi acquisition dilution, we believe this is well understood by the buyside. Looking ahead to

2H, we see a favorable setup as volume growth picks up on US industrial recovery, larger automation

orders, and MidEast activity (assuming conflict resolution holds), while margin headwinds from

price/cost and EWM dilution lap. Eddyfi also adds ~100bps to 2027E margins, and together we

think these dynamics support a case for a higher valuation multiple through year-end.

Stephen Volkmann, CFA * | Equity Analyst

(212) 284-2031 | svolkmann@jefferies.com

Chirag Patel * | Equity Associate

(212) 284-1773 | cpatel@jefferies.com

FY (Dec) 2024A 2025A 2026E 2027E Alex Dwyer * | Equity Associate

(212) 323-7698 | adwyer@jefferies.com