On Wednesday, Goldman Sachs (NYSE:GS) adjusted its outlook on Mirion Technologies (NYSE:MIR), increasing the price target to $16.00 from the previous $13.00, while maintaining a Buy rating on the stock. The revision reflects a positive view on the growing momentum in nuclear new builds.
Mirion Technologies reported its third-quarter adjusted EBITDA at $46 million, slightly below Goldman Sachs and FactSet expectations by $2 million and $3 million, respectively. The shortfall was attributed to stronger margins in the Technologies segment being offset by weaker Medical performance and increased Corporate expenses. The company's orders showed a year-over-year decline of 30%, which was anticipated following significant bookings in the third quarter of 2023.
The company faced a setback with the de-booking of half of the Turkish new build award valued at $21 million due to contractual disputes. Despite this, Mirion Technologies secured two major contracts for the Sizewell C project, which contributed to the $30 million in orders shifted from the second to the third quarter. Additionally, the company indicated an active bid pipeline of approximately $300-$400 million for large projects, which are expected to convert into orders by the end of 2025.
Mirion Technologies reaffirmed its full-year 2024 adjusted EBITDA guidance of $195 million to $205 million and its earnings per share (EPS) forecast of $0.37 to $0.42. Goldman Sachs views this guidance as achievable, with its own FY24 EBITDA estimate at $201 million.
The firm is encouraged by the momentum in the nuclear new build sector and anticipates the upcoming investor day on December 3rd to potentially serve as a positive catalyst for Mirion Technologies' shares. The new price target of $16 implies a free cash flow yield of approximately 3% for the year 2026.
In other recent news, Mirion Technologies has reported an 8% increase in revenue to $207 million during its Q3 2024 earnings call, with an adjusted EPS of $0.08. Despite a 30% decline in third-quarter orders year-over-year, the company has seen significant growth in the nuclear power and cancer care markets, driven by deals with major tech companies and advancements in radiopharmaceutical therapies.
Adjusted figures show a 13% growth in the same period. The company's backlog currently stands at $815 million, up 2% from last year, indicating a robust pipeline, particularly in the nuclear sector.
The company anticipates continued growth and margin improvements through operational efficiencies, with a positive outlook for the SMR sector, expected to see significant revenue growth in the 2030s. However, geopolitical factors have led to some project de-bookings, which could impact the industry depending on the resolution of the Ukraine conflict.
InvestingPro Insights
Mirion Technologies' recent performance and future outlook are further illuminated by data from InvestingPro. The company's market capitalization stands at $3 billion, reflecting investor confidence in its growth potential. This aligns with Goldman Sachs' bullish stance and increased price target.
InvestingPro Tips highlight that Mirion's net income is expected to grow this year, supporting the positive sentiment expressed in the article. Additionally, the company's liquid assets exceed short-term obligations, indicating a strong financial position to support its ongoing projects and potential new contracts in the nuclear sector.
The stock's recent performance has been impressive, with InvestingPro data showing a 103.62% price total return over the past year. This substantial gain underscores the market's optimism about Mirion's prospects in the growing nuclear new build market.
It's worth noting that InvestingPro offers 12 additional tips for Mirion Technologies, providing investors with a more comprehensive analysis of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.