Analyst Note| Krzysztof Smalec, CFA |
Following Nordson’s 2021 investor day, we've raised our fair value estimate for the narrow-moat-rated industrial firm to $200 from $190. The fair value increase is primarily driven by more optimistic long-term revenue growth projections. Management expects sales to grow at an over 7% CAGR over the next five years, including over 4% organic growth and an over 3% boost from acquisitions. Furthermore, the company is targeting an EBITDA margin of at least 30% by 2025, which would represent a roughly 300-basis-point margin expansion from 2020 levels.