Wells Fargo downgrades Chart Industries on elevated risk from deal

Wells Fargo analyst Roger Read downgraded Chart Industries to Equal Weight from Overweight with a price target of $148, down from $248. The lower price target reflects a 50% cut in the analyst’s 2024 EBITDA multiple to 9.0-times on the "altered growth outlook and risk assumptions" accompanying the Howden acquisition. The lower EBITDA multiple reflects a combination of elevated risk factors, including leverage, the all cash price, dilution of large-scale liquefied natural gas orders and integration execution risks, Read tells investors in a research note. While the acquisition creates a "bigger and more-diversified clean-energy company, the post-transaction growth rate would likely be reduced, which implies a lower valuation, writes Read