Modine Manufacturing Co Our thoughts ahead of FQ1

研报英文原文证据摘录

Modine Manufacturing Co Our thoughts ahead of FQ1

sis

03/27E

points year over year. This includes 18.2% EBITDA margin in the Climate segment, From To % ch Cons.

representing a 24% decremental from last quarter. Our expectation is for Climate sales Q1E 1.35 1.40 3 1.36

to return to sequential improvement starting in F2Q, where we again forecast 50% Q2E 1.64 1.66 1 1.75

organic sales growth from the prior year. On margins, we expect improvement in EBITDA Q3E 2.26 2.26 0 2.12

margin to follow revenues, and model full year Climate EBITDA margin of 20%. Q4E 3.02 3.02 0 2.60

03/27E 8.28 8.35 1 7.78

We project data center sales of over $4 billion by FY29, 4x above current levels 03/28E 12.90 13.01 1 11.28

Our analysis incorporates Modine's recently signed long-term agreement to supply $4 03/29E 17.11 17.25 1 16.06

billion+ of data center cooling products in CY27 -CY29. We assume Modine starts Neal Burk

recognizing revenue from the LTA in F4Q27, after which sales ramp to $1.35 billion to $2 Analyst

billion annually. Outside of the LTA, we use hyperscaler capex as a guide for overall data neal.burk@ubs.com

center demand. For example, we assume Modine's data center sales increase 55% in +1-212-713 4066

FY27 vs hyperscaler capex +80%. We think that these assumptions are conservative Amit Mehrotra

because Modine's rapid capacity expansion (e.g., doubling data center capacity this Analyst

year) could suggest a growth rate well above hyperscaler capex. Based on these amit.mehrotra@ubs.com

assumptions, we see scope for a 4x increase in Modine's data center business over the +1-201-352 1410

next 3 years, which should largely translate into higher earnings power. Assuming 25% Pratap Singh

incremental margin we project Climate segment EBITDA of $1.3 billion in FY29, up 3.5x Analyst