Friday, KeyBanc Capital downgraded Gardner Denver Inc. (GDI) shares to Hold from Buy. The brokerage lowered its 2009 EPS estimate to $2.30 from $2.35, and its 2010 estimate to $2.05 from $2.30.
Analyst Jeffrey Hammond continues to view the long-term story at Gardner Denver favorably, as the company has benefited from management changes and a sharpened focus on cost.
As the company rationalizes its manufacturing footprint and fully integrates the acquisition of CompAir, the analyst sees a clear path to margin expansion in Industrial Products and believes that CEO Barry Pennypacker will achieve his stated target of 14% by 2014 (which assumes no recovery in volumes).
Moreover, the analyst believes that management is positioning the company well to better capture aftermarket opportunities through product redesigns, which should add a stabilizing factor to demand and bolster profitability mix. That said, amid what the analyst believes is a solid execution story over the long term, near-term demand fundamentals remain a headwind.
In addition to a weak outlook for the domestic natural gas production environment (affecting the petroleum pump business), the analyst believes further deterioration in European industrial demand and markets for Engineered Products (particularly OEM and engineered packages) present near-term earnings risk.
While the analyst would likely revisit GDI shares upon a pullback or an improvement in demand fundamentals (particularly in Engineered Products), he believes a patient approach is warranted in the current environment and is downgrading GDI shares to Hold.
Currently, GDI is down $0.54 or 1.87% and trading at $28.37.
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June 12, 2026 17:14 ET Major central bank action was the focus this week in economic news. The European Central Bank became the first major central bank to move in response to the rising inflationary pressures in the backdrop of the conflict in the Middle East. In North America, the U.S. inflation and trade data as well as Canada’s central bank decision gained attention. The Chinese trade data was the main news in Asia.