DA Davidson analyst Chris Dankert initiates coverage on Gates Industrial Corp. (NYSE: GTES) with a Neutral rating and a price target of $29.00.

The analyst comments "We are initiating coverage of Gates Corp., GTES with a ‘NEUTRAL’ rating and $29 PT, which reflects 10.0x our CY27 adj. EBITDA forecast of $887M (5-yr. median 8.7x). As indicated by our PT, we are initiating coverage with a positive bias given material leverage to the industrial upcycle, lower debt and solid FCF support capital deployment that has not been a major factor previously, and personal mobility should add ~100bp to organic growth annually over the next several years. Ongoing softness in OEM auto/ag. remains a drag near-term, while the ICE to EV transition also presents a headwind."

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Shares of Gates Industrial Corp. closed at $25.87 yesterday.