Cantor Fitzgerald Starts Kimball Electronics (KE) at Overweight

Cantor Fitzgerald analyst Derek Soderberg initiates coverage on Kimball Electronics (NASDAQ: KE) with a Overweight rating and a price target of $34.00.

The analyst comments "We initiate coverage of Kimball Electronics ("KE") with an Overweight rating and a $34 price target. Secular tailwinds are driving adoption of advanced steering and new braking solutions. We believe the Kimball automotive story is among the best growth opportunities in the EMS (electronic manufacturing services) space today. The company has effectively built a competitive moat in the areas of automotive steering and braking with some of the most recognizable Tier 1 automotive OEMs. Historically, Kimball produced steering mechanisms for the two vehicle axles, but today's more advanced features (advanced driver assistance systems (ADAS), others) require mechanisms on each of the vehicle’s four wheels, creating an immediate opportunity to attach higher ASP (average selling price) steering solutions. Moreover, Kimball’s new regenerative braking solutions are quickly becoming a material portion of the business, as the adoption of electric vehicles presents a further tailwind to the automotive segment. We also note our belief that the automotive business generates above-corporate-average gross margins, thus providing a meaningful potential profitability tailwind. Over the medium term (5 to 7 years), we believe braking has the potential to account for roughly half of Kimball’s automotive revenue, equating to an incremental $500M+ opportunity. "

For an analyst ratings summary and ratings history on Kimball Electronics click here. For more ratings news on Kimball Electronics click here.

Shares of Kimball Electronics closed at $26.89 yesterday.

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