Analyst Note| Joshua Aguilar |
We see no reason to change our $100 fair value estimate following narrow-moat ITT’s second quarter results. Our full-year revenue assumptions of $3.01 billion and adjusted EPS of $4.54 remain completely unchanged. Second-quarter revenue of $733 million was right in line with our expectations, while adjusted EPS of 98 cents just narrowly fell below our expectations of $1.00. While management tightened its EPS range, we still expect ITT will hit the top end of its revenue guidance, but the low end of its adjusted segment operating margin range. If anything, we only have increased confidence in our organic top-line projections given ITT’s large, accumulated backlog, its price capture, and of course, its year-to-date results. That said, we did tweak our adjusted operating margin expectations downwards by 10 basis points for the full year.