DA Davidson has reiterated its Buy rating on Modine Manufacturing (NYSE: MOD), assigning a $265.00 price objective. That target implies upside from the stock's most recently referenced price of $215.72. Modine shares are trading close to their 52-week high of $220.41 and have returned 118.65% over the last 12 months.
The research house updated its financial outlook after materially increasing revenue growth assumptions tied to Modine's data center business. Those upward revisions lifted the firm's adjusted EBITDA forecasts for fiscal years 2026, 2027, and 2028, and include an expected acceleration in core growth in the fourth quarter of fiscal 2026.
Supporting the more positive outlook, InvestingPro data cited by the research note shows Modine posted revenue of $2.87 billion with year-over-year growth of 13.15%. DA Davidson characterizes Modine's data center funnel, win rates, and order bookings as "exceptional," and notes that several potential long-term agreements are progressing as major hyperscalers look to secure capacity and lower execution risk on future orders.
The firm also reported that Modine's capacity expansion initiatives remain on schedule. Within the Climate Solutions segment, DA Davidson observed "tangible margin improvement," suggesting operational leverage is beginning to surface alongside volume gains.
DA Davidson maintained its Buy stance while pointing to "plenty of further upside optionality" for the thermal management specialist. The research house's view aligns with a broadly bullish analyst consensus on MOD, despite the company's elevated trailing price-to-earnings ratio of 117.77.
Recent company results bolstered the positive sentiment. Modine delivered a robust third quarter for fiscal 2026, beating both earnings and revenue expectations. The company reported adjusted earnings per share of $1.19, above the $0.99 forecast, and revenue of $805 million, ahead of the $760.42 million estimate. Management subsequently raised fiscal 2026 guidance.
Sell-side responses to those results have been supportive. KeyBanc Capital Markets lifted its price target from $205 to $250, attributing the change to strong execution within the data center business. Oppenheimer increased its target to $240 from $220 while keeping an Outperform rating. UBS reiterated a Buy rating and holds a $210 price target, citing growth in data center sales and improving margins.
The combination of upgraded guidance, accelerating data center momentum, on-schedule capacity buildouts, and early margin improvement in a key segment underpin the recent wave of analyst optimism. At the same time, DA Davidson and other brokers highlight valuation metrics and growth trajectories in their research notes for investors who want deeper analysis and valuation context.
Summary
DA Davidson reaffirms Buy on Modine with a $265 target after raising data center revenue and adjusted EBITDA forecasts through FY2028, supported by strong bookings, capacity expansion on schedule, and recent quarterly beats that led Modine to raise guidance.
Key points
- DA Davidson set a $265 price target and reiterated a Buy rating on MOD, implying upside from the cited $215.72 share price.
- The firm upgraded data center-related revenue growth projections, increasing adjusted EBITDA estimates for FY2026-2028 and expecting core growth acceleration in Q4 FY2026.
- Modine reported Q3 FY2026 results above expectations with EPS of $1.19 and revenue of $805 million, and subsequently raised its fiscal 2026 guidance; multiple analysts raised price targets or reiterated positive ratings.
Risks and uncertainties
- High valuation metrics: Modine's trailing P/E of 117.77 is elevated, which could increase investor sensitivity to any miss on growth or margins. This affects equity investors and market sentiment in the industrial and manufacturing sectors.
- Execution risk on capacity expansion: Although stated to be on schedule, any delays in scaling production capacity could affect the company's ability to fulfill data center orders, with implications for supply chain and industrial capital expenditure cycles.
- Concentration in data center demand: A significant portion of the upgraded outlook rests on data center growth and agreements with hyperscalers; variability in that demand would directly impact Modine's revenue trajectory and the broader data center equipment market.
Investors assessing Modine should weigh the company's recent operational momentum and analyst upgrades against its high valuation and the execution demands that come with rapid data center-related expansion.