As previously reported, Longbow analyst Chris Dankert upgraded Applied Industrial Technologies to Buy from Neutral, noting that the stock is trading at its lowest relative valuation compared to the Russell 2000 in twenty years following its selloff. Applied recently reset expectations to an "achievable level" and his channel checks and key supplier commentary call for continued demand growth, making the discounted valuation unjustified, contends Dankert, who set a $70 price target on the stock.

For fiscal 2024, the company now projects EPS of $9.55 to $9.70 on an adjusted basis (prior $9.35 to $9.70), sales growth of 1.5% to 2.5% (prior 1% to 3%) including 0.5% to 1.5% on an organic daily basis (prior 0% to 2%), and EBITDA margins of 12.0% to 12.1% (prior 12.1% to 12.3%). Updated adjusted EPS guidance excludes the $3.0 million tax benefit recorded in the fiscal 2024 second quarter related to a deferred tax valuation allowance adjustment. Guidance incorporates current economic uncertainty and assumptions of easing end-market demand near term, as well as ongoing inflationary headwinds. Guidance does not assume contribution from Kopar (pending the transaction close) or future acquisitions. FY24 EPS, revenue consensus $9.66, $4.5B, respectively.