Truist Securities has lowered its price target on Ralliant Corp. (NYSE: RAL) to $49.00 from $62.00, while maintaining a Buy rating after the company released fourth-quarter results. The new target still implies meaningful upside relative to Ralliant's prevailing share price of $38.42; analyst targets in the wider market range from $41 to $65, according to InvestingPro data.
Shares of Ralliant plunged 32% on the report, a sharp move against the S&P 500's roughly 1% decline on the same day. The sell-off followed disclosure of a $1.44 billion non-cash goodwill impairment associated with EA Elektro-Automatik. Management attributed the write-down to a weaker outlook for adoption in the electric-vehicle industry, which is the primary end market for EA's high-power supplies and battery test systems.
Operationally, Ralliant's fourth quarter showed constructive signs. Revenue rose by roughly 5% sequentially, a pace management said exceeded expectations. The company reported earnings per share of $0.69, which came in above the high end of guidance, and EBITDA that landed near the top of management's internal range. For the full fiscal year, Ralliant produced $2.07 billion in revenue and $374.2 million in EBITDA.
Despite those results, the company's outlook for 2026 disappointed investors. Ralliant provided guidance for adjusted EBITDA margin in the 18% to 20% range and adjusted EPS between $2.22 and $2.42, both of which fell short of consensus expectations. Management cited higher operating costs tied to being a public company as a key headwind, estimating a 250 basis-point year-over-year drag on margins. That pressure includes elevated employee-related costs at both segment and corporate levels.
Ralliant also disclosed near-term growth investments intended to strengthen manufacturing, commercial execution, and innovation. Management expects these initiatives to create a 50 to 100 basis-point drag on total company margins in the near term but indicated they are designed to support stronger top-line performance in 2027 as tailwinds from grid modernization, defense technology, and power electronics remain intact.
From a cash perspective, the company remains well capitalized. Levered free cash flow for the last twelve months was $358.4 million, translating to a free cash flow yield of roughly 8% at current prices.
Several analyst actions and corporate items have added to the market's mixed view on Ralliant. RBC Capital lowered its price target to $41 from $52, citing a 2026 guidance miss that it attributes to unexpected post-spin, segment-level operating costs. Conversely, Oppenheimer raised its target to $60, pointing to the company's solid third-quarter 2025 performance and longer-term growth potential. Separately, Truist had earlier initiated coverage with a Buy rating and a $62 target; the latest move reduced that target to $49 while keeping the Buy stance.
Ralliant also announced a quarterly cash dividend of $0.05 per share, payable on March 23, 2026, to stockholders of record as of March 9, 2026. On the financing front, the company amended its credit agreement with PNC Bank and other lenders to reduce the Term SOFR interest rate by 0.10% and remove the ratings-based pricing grid.
Market-level valuation judgments remain mixed. InvestingPro analysis cited in the company's coverage indicates Ralliant is fairly valued at current levels, with an EPS forecast for fiscal 2026 of $2.69. That projection contrasts with the company's own adjusted EPS guidance of $2.22 to $2.42 for 2026.
Takeaway - Ralliant's financial snapshot is a blend of near-term operational resilience and notable headline risks. The non-cash goodwill impairment tied to EV demand materially affected reported equity, prompting a sharp share-price reaction, even as the business's recent revenue and earnings execution and strong free cash flow underpin some fundamental support.
Investors and analysts are wrestling with rising public-company costs and near-term margin pressure driven by both the impairment and planned growth investments, while weighing the potential for stronger growth beyond 2026 as grid modernization and other industry tailwinds reassert themselves.