Messy Print and Mixed Signaling Rightfully Brings JBT Stock Back to Earth

Narrow-moat-rated John Bean Technologies whiffed on both its guidance and our fourth-quarter sales, EBITDA, and EPS expectations. Management demurred from providing full-year 2022 EPS guidance, citing the uncertain operating environment. Despite the over 19% price decline on the Feb. 23 trading day, however, we think most of the sell-off was justified. Even so, we think our long-term thesis remains intact. JBT continues to benefit from multiple secular trends, including labor saving automation, environmental sustainability, and enhanced throughput on the foodtech side, as well as infrastructure spending and strong cargo delivery trends on the aerotech side. A weak near-term anchor in operating margins was offset by a stronger than expected organic top-line guide in foodtech, a lower long-term tax rate (we no longer believe tax reform is likely), and time value of money. Therefore, we raise our fair value estimate by $1 to $109. Acquisition growth contributes to JBT’s intrinsic value in our model by nearly $3 per share.