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MSA Safety’s 4Q Numbers Beat Analysts’ Estimates

MSA Safety delivered better-than-expected numbers in the fourth quarter as the manufacturer of safety equipment saw an increase in demand for its products.

MSA Safety (MSA) posted earnings per share (EPS) of $1.27 for the fourth quarter, which was ahead of analysts’ expectations of $1.05.

Revenue increased 3% year-on-year to $388.25 million, topping analysts’ estimates of $335.72 million. The increase in 4Q revenues was primarily attributable to an 18% increase in breathing apparatus sales.

Notably, operating cash flow increased 26% year-on-year to $96 million in 4Q.

For fiscal 2020, the company generated sales of $1.35 billion, down from the $1.4 billion posted in 2019. Diluted earnings per share came in at $4.50, versus $4.80 in the comparable year-ago period.

MSA Safety Chairman, President and CEO Nish Vartanian said, “Our organization finished out a challenging year with strong fourth quarter performance that resulted in record revenue for the quarter, double digit growth in cash flow and a healthy backlog to enter 2021.”

In January, MSA safety completed the Bristol Uniforms acquisition for ~$60 million. This has expanded MSA’s serviceable market in the international fire service business. (See MSA Safety stock analysis on TipRanks)

Recently, Stifel Nicolaus analyst Stanley Elliott raised MSA Safety’s price target to $165 from $136 and reiterated a Buy rating. Elliott expects the gradual recovery being seen across the industrial landscape to continue in 2021.

The rest of the Street has a Moderate Buy consensus rating on the stock, based on 1 Buy and 1 Hold. The average analyst price target of $160 implies about 3.7% downside potential from current levels. That’s after the stock has gained ~23% over the past year.

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