Investors should be long Lincoln Electric for long periods of time – KeyBanc

Lincoln Electric Holdings Inc (NASDAQ:) shares were lifted to Overweight from Sector Weight with a $232 price target at KeyBanc Capital Markets on Wednesday.

The company is a “high-quality operator with robotics” while automation and EV charging growth are catalysts, KeyBanc analysts said in a note to clients.

“We have long considered LECO a high-quality franchise with a strong management team, but we often got hung up on valuation,” said the analysts.

“With its move toward automation and now EV charging stations, we have become less focused on NT cycle considerations and are more interested in LECO’s LT track record of smart strategic positioning, which has resulted in an increasing TAM, accelerating revenue growth, margin expansion, and an enviable track record of capital deployment and value creation.”

The analysts state that as LECO broadens its product offerings to position for secular trends, KeyBanc increasingly looks at it as more of a consistent compounder and less of a traditional cyclical industrial.

“We expect some investors will view this upgrade as ill-timed given deceleration in some industrial macro indicators, and we are not making the case that LECO will no longer be cyclical,” continued the analysts. “We are saying, however, that LECO is moving into the ranks of companies that are only truly ‘on sale’ in recessions and that industrial investors should lean toward being long for long periods of time.”