Saturday, July 5, 2014

Middleby Corporation Equity Research

According to analyst estimates, food equipment company Middleby Corporation  is on track for low-teens sales growth, with 12% and 22% EPS growth over the next couple of years. Moreover, there are a few reasons why investors can expect upside to those estimates going forward. In addition, industry rivals like Dover Corp.   and Illinois Tool Works  are also reporting good numbers in the food equipment sector -- indicating that Middleby's end markets are good. Is all of it enough to justify its valuation of nearly 26 times forward earnings for 2014?


Middleby middles it
The company operates out of three industry groupings and a quick look at its 2013 revenue split reveals the relative importance of each.


Source: Middleby Corporation Presentations

Middleby's commercial food segment competes with Illinois Tool Works and Dover Corporation, and its rivals are making some positive noises about the marketplace. For example, Illinois Tool Works reported strong growth in its food equipment sales in its most recent quarter. Moreover, in common with Middleby, Dover Corp. sees expansion opportunities in its refrigeration and food segment through products that enhance productivity.