GICS Sector : Industrials
EnPro Industries, Inc.engages in the design, development, manufacture, marketing, and service of engineered industrial products in the United States, Europe, and internationally.It operates through three segments: Sealing Technologies, Advanced Surface Technologies, and Engineered Materials.
Enpro reported a robust third quarter, with revenues growing nearly 10% organically, driven by mid-single-digit growth in Sealing Technologies and 17% top-line growth in Advanced Surface Technologies (AST). The company's adjusted EBITDA margin exceeded 24%, supported by increased operating expenses backing growth initiatives. Earnings per share (EPS) came in at $1.99, beating estimates of $1.93. The strong performance was a testament to the company's effective execution of its Enpro 3.0 strategy.
Publication Date: Nov -13
In Sealing Technologies, sales rose 5.7% to $178.2 million, fueled by strength in aerospace and food and biopharma applications, as well as strategic pricing initiatives. Adjusted segment EBITDA margin remained robust at over 32%. AST saw sales increase 17.3% to $108.5 million, driven by growth in precision cleaning solutions tied to advanced node chip production. Adjusted segment EBITDA margin was 20.1%.
Enpro continued to advance its Enpro 3.0 strategy with the acquisition of Overlook Industries and the agreement to acquire AlpHa Measurement Solutions. The combined revenue of both acquisitions is expected to be around $60 million in 2026, with high single-digit to low double-digit growth anticipated. The acquisitions are expected to be accretive to Enpro's core, with healthy margins already in place.
With a current P/E Ratio of 53.5 and EV/EBITDA of 19.32, Enpro's valuation suggests a premium for its growth prospects. Analysts estimate revenue growth of 9.8% next year, indicating a strong outlook. Enpro's net leverage ratio remains manageable at 1.2x, and the company has generated $105 million in free cash flow year-to-date. The dividend yield stands at 0.56%, with a Free Cash Flow Yield of 3.35%. As Enpro continues to invest in growth opportunities, its ROIC stands at 5.25%, with an ROE of 5.85%. The Net Debt / EBITDA ratio is 1.22, indicating a reasonable level of indebtedness.
For full-year 2025, Enpro expects total revenue growth of 7% to 8%, adjusted EBITDA in the range of $275 million to $280 million, and adjusted diluted EPS to be between $7.75 and $8.05 per share. The company is confident in its ability to deliver on its growth targets, driven by its diversified portfolio and strategic initiatives. As Enpro looks ahead to 2026, its prospects appear bright, with a strong pipeline of growth opportunities and a solid financial foundation.
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Sealing Technologies' 5.5% growth is driven by increasing demand for energy-efficient solutions, growing adoption of renewable energy sources, and rising need for emission control in industrial processes. Additionally, EnPro Industries' strategic acquisitions and investments in R&D have enhanced the segment's product offerings and expanded its customer base.
Advanced Surface Technologies' 5.8% growth is driven by increasing demand for high-performance coatings in aerospace and industrial markets, coupled with EnPro Industries' strategic investments in R&D and expansion into new geographies, resulting in market share gains and improved operational efficiencies.
The 4.2% growth in Intersegment Sales from EnPro Industries, Inc. is driven by increased demand for sealing products in the aerospace and industrial markets, as well as the company's strategic acquisitions and expansion into new geographies, resulting in higher sales volumes and improved pricing power.
EnPro Industries' Sealing Technologies segment provides a range of sealing solutions, including mechanical seals, compression packings, and gasketing products, for various industries such as oil and gas, chemical processing, and power generation.
EnPro Industries' Bearings segment offers a variety of bearings and bushings for industrial, aerospace, and automotive applications, including ball bearings, roller bearings, and plain bearings.
EnPro Industries' Material Sciences segment provides a range of materials and components, including ceramic, metal, and composite materials, for use in various industries such as aerospace, industrial, and automotive.
EnPro Industries' Power Transmission segment offers a range of power transmission products, including gears, couplings, and universal joints, for use in industrial, aerospace, and automotive applications.
The threat of substitutes for EnPro Industries, Inc. is medium due to the availability of alternative products and services in the market.
The bargaining power of customers for EnPro Industries, Inc. is low due to the company's strong brand reputation and customer loyalty.
The bargaining power of suppliers for EnPro Industries, Inc. is medium due to the company's dependence on a few key suppliers.
The threat of new entrants for EnPro Industries, Inc. is high due to the relatively low barriers to entry in the industry.
The intensity of rivalry for EnPro Industries, Inc. is high due to the competitive nature of the industry and the presence of several established players.
| Value | |
|---|---|
| Debt Weight | 31.78% |
| Debt Cost | 11.68% |
| Equity Weight | 68.22% |
| Equity Cost | 11.68% |
| WACC | 11.68% |
| Leverage | 46.59% |
Value: 1.8
Growth: 4.6
Quality: 6.3
Yield: 1.0
Momentum: 8.5
Volatility: 6.7
1-Year Total Return ->
Value: 6.0
Growth: 6.1
Quality: 6.1
Yield: 0.0
Momentum: 4.5
Volatility: 5.7
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Value: 1.4
Growth: 6.0
Quality: 6.2
Yield: 0.0
Momentum: 6.0
Volatility: 6.0
1-Year Total Return ->
Value: 4.1
Growth: 6.8
Quality: 5.8
Yield: 0.0
Momentum: 1.5
Volatility: 7.0
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Value: 1.1
Growth: 4.4
Quality: 5.4
Yield: 0.0
Momentum: 10.0
Volatility: 4.0
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Value: 5.1
Growth: 4.0
Quality: 4.8
Yield: 2.0
Momentum: 2.0
Volatility: 4.7
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