We reiterate our Neutral recommendation on Dover Corporation with a
target price of $86. The company's fourth-quarter 2013 adjusted
earnings grew 17% year over year to $1.28 per share. Total revenue
improved 10% year on year to $2.21 billion. Dover will benefit from
its acquisitions and rise in bookings and orders. The sale of its
DEK Printing Machines unit will simplify Dover's business profile
and enable it to focus on its key industrial growth spaces i.e.
energy, refrigeration and food equipment, fluids as well as
printing and identification. However, lower rig counts will hurt
the Energy platform's performance. Furthermore, volatile raw
material costs and rising macroeconomic uncertainty will remain
headwinds for Dover.
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.
Till fiscal 2013, the company operated its business under four
segments - Communication Technologies (19% of total revenue in
2013), Engineered Systems (42%) comprising Fluid Solutions and
Refrigeration & Industrial, Energy (26%) and Printing &
On Mar 5, 2014, the company announced a new segment structure
that included Dover Energy, Dover Engineered Systems, Dover Fluids
and Dover Refrigeration & Food Equipment.
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