Risk Reward Update

研报英文原文证据摘录

Risk Reward Update

UpdateM

RiskRisk RewardReward– Gates -IndustrialGatesCorporationIndustrialPLC (GTES.N)Corporation PLC (GTES.N)

NTM Positive Rate of Change Already Captured in Consensus

PRICE TARGET $28.00 EQUAL-WEIGHT THESIS

Our price target of $28 is based on an ~10x EV/EBITDA multiple of our blended '27/'28 ▪Model a modest acceleration in LSD

EBITDA of $912M. Our multiple assumes GTES trades at a 40%+ discount to peers, roughly organic growth between 2026-2027 behind

in line with recent levels as the market is already underwriting organic acceleration over the stabilizing end markets (Industrial +

NTM. Trucking), easing channel destock and

tailwinds from accelerating rate of new $31.36

product launches offset by volume

Consensus Price Target Distribution $26.00 $37.00 headwinds from tariffs.

MS PT

we see a path to get back toSource: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates ▪While

targeted ~2x IP, Consensus already models

MSD organic growth in 2H26, which limits

revision potential.

RISK REWARD CHART ▪Continued consumer pressure would

support a "stronger for longer' Auto AM,

GTES' largest end market at ~33% of sales. USD $36.00$36.00(+38.30%)$36.00(+38.30%)(+38.30%)

▪Valuation overhang lifting but not gone

completely, Blackstone has sold down

32 ownership to ~8% (vs 63% peak)

$28.00$28.00(+7.57%)$28.00(+7.57%)(+7.57%)

$26.03$26.03$26.03 Consensus Rating Distribution

73% Overweight

27% Equal-weight

$18.00$18.00(-30.85%)$18.00(-30.85%)(-30.85%) 0% Underweight

MS Rating

8 Source: Refinitiv, Morgan Stanley Research

0 Risk Reward Themes

JUL '25 JAN '26 JUL '26 JUL '27

Self-help: Positive

Key: Historical Stock Performance Current Stock Price Price Target View descriptions of Risk Rewards Themes here

Source: Refinitiv, Morgan Stanley Research