Goldman Sachs Starts ATS Corp (ATS) at Sell

Goldman Sachs analyst Joe Ritchie initiates coverage on ATS Corp (NYSE: ATS) with a Sell rating and a price target of $34.00.

The analyst said :"While we view automation as a long-term secular theme given aging demographics, a tight labor market and the opportunity for productivity gains, we believe the company’s end markets in the near-medium term are at a cyclical pause. Specifically, outside of Life Sciences, order trends have either been declining (e.g., Transportation) or muted across the rest of the portfolio and, as such, we believe organic growth will likely decline in FY25 (GS: -4%). Additionally, while we continue to be sanguine on US manufacturing with mega project orders (link) for electrical/HVAC/automation equipment providers, ATS is not likely to benefit as much as others (e.g., ETN, PH) given no exposure to semis capex and later cycle exposure to EV investment. Additionally, while we expect ATS to beat near-term expectations (GS F4Q EPS: $0.65), we believe FY25 EPS is likely to fall short of consensus expectations (GS F25 EPS: $2.50). Hence, we initiate at Sell because we believe ATS will likely underperform our coverage on a relative basis over the next 12 months. We would consider getting more constructive on ATS once we have better visibility on a growth inflection relative our Multis coverage."

For an analyst ratings summary and ratings history on ATS Corp click here. For more ratings news on ATS Corp click here.

Shares of ATS Corp closed at $36.85 yesterday.

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