We are reiterating our Neutral recommendation on Dover Corporation
with a target price of $87. In third-quarter 2014, adjusted
earnings of the company grew 8% year over year to $1.35 per share,
driven by revenue growth and strength in bookings across all
segments. However, the company slashed its earnings guidance for
2014 to the new range of $4.75 $4.80 per share due to the impact of
transaction costs from acquisitions. Further, adverse macroeconomic
factors such as a stronger U.S. dollar and lower long-term interest
rates might hurt Dover's growth. Although Dover expects to benefit
from acquisitions, strong bookings and orders and anticipated
growth in the Energy segment, volatile raw-material costs and
increased exposure to political and monetary instability due to
expansion in lower cost countries remain areas of concern.
Incorporated in 1955, New York-based Dover Corporation (DOV) is
an industrial conglomerate producing a wide range of specialized
industrial products and manufacturing equipment. It operates
primarily in the U.S. and has subsidiaries and affiliates in
Canada, France, Germany, the Netherlands, Sweden, China and the
United Kingdom. Dover caters to a diverse clientele, principally
spread across the Americas, Europe and Asia.
The company operated its business under four segments - Fluids
(18% of total revenue in the third quarter of 2014), Engineered
Systems (33%), Energy (24%) and Refrigeration & Food Equipment
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