Swing and a Miss: JBT’s AeroTech Results Were Appreciably Below Expectations; We Lower FVE

We are at a loss at the market’s positive reaction to narrow-moat JBT’ third-quarter release. In fact, not only did the company miss our third-quarter expectations, management’s implied guide came appreciably below what we were hoping for full-year 2021. In fact, we reduced our adjusted EPS expectations by 11.6% to $4.30. While we concede it’s a difficult operating environment, airport equipment sales came in materially below what we earmarked for the quarter (by about 14%). Furthermore, aerotech’s segment operating profit margins came in below our expectations by 570 basis points. Nonetheless, results were really a tale of two cities, as foodtech’s third-quarter revenue and margins were broadly in line with our expectations. Based on lower-than-expected results, we lower our fair value estimate to $108 from $112.