Jefferies analyst Stephen Volkmann initiated coverage of Gates Industrial with a Buy rating and $21 price target. The analyst views Gates as “one of the more compelling self-help stories” under the firm’s coverage. The firm sees significant margin upside that is largely independent of volume, EBITDA margins already in the low 20s that should have upside to mid 20s while strong free cash flow facilitates debt paydown and share repurchase.
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