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.
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.
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