Core Thesis - Hubbell Incorporated (HUBB) is viewed positively due to its strong market position, consistent returns, and potential benefits from U.S. electrical grid modernization [3][6]. Company Overview - Hubbell is a dividend-paying industrial conglomerate specializing in electrical and utility solutions, with a diverse brand portfolio including Hubbell, Burndy, Bell, and Aclara [2]. - The company's shares were trading at $427.85 as of December 1st, with trailing and forward P/E ratios of 26.76 and 21.93 respectively [1]. Financial Performance - Hubbell's five-year annualized revenue growth was in the mid-single digits, which lagged behind the S&P 500, while recent revenue growth was only 1%, compared to the broader market's 18.2% [4]. - Despite slower revenue growth, the company maintained mid-double-digit profit margins and a return on equity that exceeded QVI's benchmark, although it was below the S&P 500's 49.2% [4]. Capital Allocation and Buyback - The company has a new $500 million buyback authorization through 2028, with $225 million repurchased in the first half of 2025, indicating disciplined capital allocation [5]. - Hubbell's return on invested capital (ROIC) surpassed its cost of capital, highlighting efficient capital deployment [5]. Market Position and Competitive Advantage - Morningstar assigns Hubbell a wide moat due to its ability to generate mid-teens returns on invested capital over two decades and its resilience during economic downturns [3]. - The company's competitive margin profile and durable market position are supported by its peers, such as Eaton and Schneider Electric [3].

Core Viewpoint - Hubbell (HUBB) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often adjust their valuations based on changes in earnings estimates, leading to buying or selling actions that affect stock prices [4]. Hubbell's Earnings Outlook - For the fiscal year ending December 2025, Hubbell is expected to earn $18.16 per share, with a 1.6% increase in the Zacks Consensus Estimate over the past three months [8]. - The upgrade reflects an improvement in Hubbell's underlying business, which is likely to drive the stock price higher as investors respond positively to this trend [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have generated an average annual return of +25% since 1988 [7]. - The upgrade of Hubbell to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9][10].

Company Overview - Hubbell Incorporated (HUBB) has a market cap of $21.6 billion and operates as a global designer, manufacturer, and seller of electrical and utility solutions, serving various markets including industrial, commercial, institutional, and utility [1] Stock Performance - Over the past 52 weeks, HUBB shares have decreased by 10.6%, while the S&P 500 Index has increased by 10.5%. Year-to-date, HUBB shares are down 2.6%, compared to an 11.2% gain for the S&P 500 [2] - HUBB has also underperformed the Industrial Select Sector SPDR Fund (XLI), which returned 5.6% over the same period [3] Recent Financial Results - In Q3 2025, HUBB reported revenue of $1.5 billion, which was weaker than expected. However, shares rose by 4.9% following the announcement due to an adjusted EPS of $5.17, which exceeded estimates. The company raised its full-year adjusted EPS guidance to a range of $18.10 - $18.30 [4] - Analysts project a 9.6% year-over-year growth in adjusted EPS for the fiscal year ending December 2025, estimating it to be $18.16. The company's earnings surprise history shows mixed results, with three out of the last four quarters exceeding consensus estimates [5] Analyst Ratings and Price Targets - Among 13 analysts covering HUBB, the consensus rating is a "Moderate Buy," consisting of six "Strong Buy" ratings and seven "Holds" [5] - Barclays raised its price target for HUBB to $456 while maintaining an "Equal Weight" rating. The mean price target of $488.90 indicates a 20% premium to current price levels, with the highest target at $530 suggesting a potential upside of 30.1% [7]

Core Viewpoint - Hubbell Incorporated has successfully priced an offering of $400 million in senior notes with a 4.80% interest rate, maturing in 2035 [1] Group 1: Offering Details - The offering is expected to close on November 14, 2025, pending customary closing conditions [2] - Net proceeds from the offering will be used to fully redeem the outstanding 3.350% Senior Notes due 2026, also amounting to $400 million, and to cover any premium and accrued interest [2] - BofA Securities, HSBC Securities, and J.P. Morgan Securities are acting as joint book-running managers for the offering [3] Group 2: Company Overview - Hubbell Incorporated is a leading manufacturer of utility and electrical solutions, with 2024 revenues reported at $5.6 billion [6] - The company is headquartered in Shelton, Connecticut, and focuses on enabling customers to operate critical infrastructure safely and efficiently [6]

Company Overview - Hubbell Incorporated is a significant player in the electrical and utility solutions industry, providing a variety of products and services such as electrical wiring devices, lighting fixtures, and power systems [1] - The company competes with industry leaders like Eaton Corporation and Schneider Electric, focusing on innovation and strategic growth to maintain its market position [1] Financial Performance - On October 29, 2025, Seaport Global set a price target of $515 for Hubbell, indicating a potential price increase of approximately 9.53% from the current trading price of $474.48 [2][5] - The stock has experienced a trading day range between $458.96 and $474.95, with a current price reflecting a 4.20% increase today, equivalent to a $19.14 rise [2][5] - Hubbell's market capitalization is approximately $25.21 billion, showcasing its substantial presence in the market [4][5] - Over the past year, the stock has seen a high of $481.35 and a low of $299.43, indicating volatility in its stock price [4] Earnings Call Insights - The recent Q3 2025 earnings call, led by President, CEO, and Chairman Gerben Bakker, along with Executive VP and CFO William Sperry, provided valuable insights into the company's financial health [3] - Analysts from major financial institutions, including JPMorgan Chase & Co., attended the call, emphasizing the significance of Hubbell's strategic direction and financial performance [3]

Financial Performance - Net income for the three months ended September 30, 2025, was $256.7 million, an increase of 12.7% compared to $227.8 million for the same period in 2024[9]. - Comprehensive income attributable to Hubbell Incorporated for the three months ended September 30, 2025, was $259.5 million, up from $246.2 million in 2024, reflecting a growth of 5.4%[9]. - For the nine months ended September 30, 2025, net income reached $666.7 million, representing a 13.9% increase from $585.3 million in 2024[10]. - Basic earnings per share for the three months ended September 30, 2025, were $4.80, up from $4.46 in the same period of 2024, reflecting a growth of 7.6%[19]. - Net income attributable to Hubbell Incorporated for the three months ended September 30, 2025, was $255.5 million, compared to $226.2 million for the same period in 2024, representing an increase of 12.9%[76]. - Basic earnings per share for the three months ended September 30, 2025, was $4.80, up from $4.21 in 2024, reflecting a growth of 14.0%[76]. - Nine-month net income available to common shareholders for 2025 was $661.8 million, compared to $579.7 million in 2024, marking an increase of 14.2%[76]. Assets and Liabilities - Total assets as of September 30, 2025, amounted to $7,526.9 million, a significant increase from $6,847.7 million at the end of 2024[13]. - Total liabilities as of September 30, 2025, were $3,833.9 million, up from $3,437.1 million at the end of 2024, reflecting a rise of 11.5%[13]. - Total current assets as of September 30, 2025, were $2,790.0 million, with total liabilities of $3,833.9 million[20]. - Total current liabilities increased significantly to $2,054.3 million from $1,274.2 million, reflecting a 61.0% rise[13]. - Long-term debt decreased to $1,044.8 million from $1,442.7 million, a reduction of 27.6%[13]. - The carrying value of long-term debt as of September 30, 2025, was $1,444.5 million, slightly up from $1,442.7 million on December 31, 2024[96]. - Non-current liabilities increased to $734.8 million as of September 30, 2025, compared to $720.2 million at December 31, 2024, reflecting a rise of 2.9%[68]. Cash Flow and Operating Activities - The company reported a net cash provided by operating activities of $582.3 million for the nine months ended September 30, 2025, compared to $558.8 million in 2024, indicating a 4.2% increase[15]. - The company reported a net cash provided by operating activities of $558.8 million for the nine months ended September 30, 2024[20]. - The company reported a net cash used in financing activities of $42.6 million for the nine months ended September 30, 2025, significantly improved from $476.4 million in 2024[15]. Acquisitions and Investments - The company made acquisitions totaling $129.1 million during the nine months ended September 30, 2025, compared to a net cash inflow of $5.9 million from acquisitions in 2024[15]. - The company acquired Alliance USAcqCo 2, Inc. (Ventev) for approximately $73 million, recognizing intangible assets of $34.5 million and goodwill of $40.0 million[29]. - In the third quarter of 2025, the company acquired Nicor, Inc. for approximately $56 million, with recognized intangible assets of $18.6 million and goodwill of $26.4 million[30]. - The company completed the acquisition of DMC Power for approximately $825 million on October 1, 2025, financed through a $600 million unsecured term loan and commercial paper[34][35]. Inventory and Accounting Changes - The change in inventory accounting method from LIFO to FIFO resulted in a cumulative effect adjustment increasing inventory by $167.1 million as of January 1, 2024[19]. - Total inventories increased to $1,053.7 million as of September 30, 2025, up from $1,010.4 million at December 31, 2024, representing a growth of approximately 4.3%[61]. Equity and Dividends - The company’s total equity as of September 30, 2025, was $3,693.0 million[20]. - Total equity increased to $3,681.3 million as of September 30, 2025, up from $3,396.2 million at December 31, 2024, indicating a growth of 8.4%[70]. - Cash dividends declared per share were $2.64 for the nine months ended September 30, 2025, totaling $141.2 million[70]. Segment Performance - Total net sales for the three months ended September 30, 2025, were $1,502.4 million, an increase from $1,442.6 million in the same period of 2024, representing a growth of 4.2%[46]. - Utility Solutions segment net sales for the three months ended September 30, 2025, were $943.8 million, slightly up from $933.1 million in 2024, while Electrical Solutions segment net sales increased to $558.6 million from $509.5 million[46]. - The Company reported a gross profit of $544.3 million for the three months ended September 30, 2025, compared to $506.0 million in 2024, reflecting a gross margin improvement[58]. - Operating income for the three months ended September 30, 2025, was $330.6 million, up from $312.7 million in the same period of 2024, indicating a year-over-year increase of 5.0%[58]. Pension and Benefits - The net periodic benefit cost for pension and other benefits for the nine months ended September 30, 2025, was $14.4 million, compared to $10.6 million in 2024, indicating a rise of 36.0%[78]. - The net periodic benefit cost for pension and other benefits for Q3 2025 was $4.7 million, an increase from $3.4 million in Q3 2024, indicating a 38.2% rise[78]. - Interest cost for pension benefits increased to $26.4 million for the nine months ended September 30, 2025, compared to $25.0 million in 2024[78]. - The company contributed $20.0 million to its U.S. qualified plans and $1.4 million to foreign pension plans during the nine months ended September 30, 2025[79]. Legal and Contingencies - The Company recognized a liability for contingencies that are probable of occurrence and can be reasonably estimated, reflecting ongoing legal proceedings[97].

Core Insights - Hubbell Incorporated reported strong earnings for the quarter ending October 28, 2025, with an EPS of $5.17, surpassing the estimated $4.98 and showing a significant improvement from last year's EPS of $4.49 [2][3] - The company experienced a slight miss in revenue expectations, reporting $1.5 billion against an estimated $1.54 billion, but still achieved a 4.2% increase in revenue compared to the same period last year [2] Financial Metrics - Hubbell's financial metrics indicate stability and growth potential, with a P/E ratio of approximately 27.21, a price-to-sales ratio of about 4.08, a debt-to-equity ratio of approximately 0.54, and a current ratio of around 1.36 [3] - The optimistic profit forecast for 2025 is driven by robust demand for electrical equipment, particularly from data centers, reflecting confidence in the technology sector's growth [3]

Financial Data and Key Metrics Changes - Hubbell reported a 4% increase in sales to approximately $1.5 billion and a 4% increase in operating profit to $358 million [12][13] - Adjusted diluted EPS rose by 12%, and free cash flow increased by 34% to $254 million [14][15] - The company raised its full-year 2025 outlook, anticipating stronger margin performance to offset lower organic growth [7][21] Business Line Data and Key Metrics Changes - The utility segment saw sales increase by 1% to $944 million, with operating profit remaining stable at $242 million [15][16] - Grid infrastructure within the utility segment achieved high single-digit growth, while grid automation sales declined by 18% [5][16] - The electrical segment experienced double-digit sales growth of 10% and a 17% increase in operating profit, with 8% organic growth across end markets [18][19] Market Data and Key Metrics Changes - Strong performance was noted in the T&D markets, driven by utility investments in grid interconnections and aging infrastructure [4][16] - The company observed a return to growth in telecom and enclosures after previous overstock issues [16] - The order book for the utility segment showed significant acceleration in September and October, indicating strong future growth potential [16][23] Company Strategy and Development Direction - Hubbell's acquisition of DMC Power is expected to enhance its utility connector offerings and contribute approximately $0.20 to adjusted EPS in 2026 [8][9] - The company aims to simplify its HES segment to drive productivity and operating efficiencies, positioning itself well for long-term margin expansion [6][19] - Hubbell is focused on capital allocation strategies that target high-growth, high-margin businesses in attractive markets [8][9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to deliver strong performance in 2026, driven by megatrends in grid modernization and electrification [7][29] - The anticipated normalization of supply chain dynamics is expected to support continued growth [25][26] - Management acknowledged the challenges faced in the utility segment but remains optimistic about future recovery and growth [32][70] Other Important Information - Bill Sperry, the CFO, announced his retirement at the end of the year, with Joe Capozzoli set to succeed him [9][10] - The company has successfully managed cost inflation through pricing and productivity actions, which have positively impacted price-cost productivity [6][7] Q&A Session Summary Question: Insights on 2026 utility growth expectations - Management indicated that while there is potential for strong growth, a conservative approach will be taken in planning resources for 2026 [32][34] Question: Details on September-October order strength - Management noted broad-based order strength in T&D markets, with expectations for continued growth [38][40] Question: Sustainability of the lower tax rate into 2026 - The lower tax rate is project-driven and is expected to normalize next year [42] Question: Clarification on utility segment recovery - The recovery shape is as expected, with timing shifted but still showing positive signs [47][50] Question: Pricing dynamics and market pushback - Pricing has been strong, with constructive discussions with channel partners, indicating good stickiness [71][72] Question: Insights on behind-the-meter infrastructure investments - The company sees strong opportunities in data center investments, particularly on the electrical side [78][80] Question: Visibility on grid automation and meter performance - Management acknowledged that while performance has been below expectations, they are focused on improving the business [84]

Financial Data and Key Metrics Changes - Hubbell reported a 4% increase in sales to approximately $1.5 billion and a 4% increase in operating profit to $358 million for Q3 2025 [12][13] - Adjusted diluted EPS rose by 12%, and free cash flow increased by 34% to $254 million [14][15] - The company raised its full-year 2025 outlook, anticipating stronger margin performance to offset lower organic growth [7][21] Business Line Data and Key Metrics Changes - The utility segment saw sales increase by 1% to $944 million, with operating profit remaining stable at $242 million [15][16] - Grid infrastructure within the utility segment achieved high single-digit organic growth, while grid automation sales declined by 18% [4][5] - The electrical segment experienced double-digit sales growth of 10% and a 17% increase in operating profit, with 8% organic growth across end markets [18][19] Market Data and Key Metrics Changes - Strong performance was noted in T&D markets, driven by utility investments in grid interconnections and aging infrastructure [4][16] - The telecom and enclosures markets returned to growth after previous declines due to overstock situations [16] - The company anticipates robust project pipelines in utility solutions, particularly in substation and transmission markets [29] Company Strategy and Development Direction - Hubbell's acquisition of DMC Power is aimed at enhancing its utility connector offerings and is expected to contribute approximately $0.20 to adjusted EPS in 2026 [8] - The company is focused on capital allocation strategies to acquire high-growth, high-margin businesses [8] - Hubbell aims to leverage its strong market positions and proactive cost management to drive long-term margin expansion [6][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strong performance in 2026, driven by megatrends in grid modernization and electrification [7][29] - The company noted that supply chain normalization dynamics are expected to improve as they exit 2025 [25] - Management highlighted the importance of managing pricing and productivity to offset cost inflation [6][21] Other Important Information - Bill Sperry, the CFO, announced his retirement at the end of the year, with Joe Capozzoli set to succeed him [9][10] - The company has successfully managed cost inflation through pricing and productivity actions [6][14] Q&A Session Summary Question: Insights on 2026 utility growth expectations - Management acknowledged the potential for strong growth but emphasized a prudent approach to planning resources [33][34] Question: Clarification on September-October order strength - Management noted broad-based order strength in T&D markets, indicating a positive outlook for future growth [40][41] Question: Sustainability of the lower tax rate into 2026 - Management indicated that the lower tax rate is project-driven and expected to normalize next year [42] Question: Recovery pace for utility segment - Management confirmed that the organic guidance reduction was entirely within the utility segment, with recovery timing shifting as expected [47][50] Question: Pricing dynamics and market elasticity - Management reported strong price realization and constructive discussions with channel partners regarding pricing [71][72]

Financial Data and Key Metrics Changes - The company reported a 4% increase in sales to approximately $1.5 billion and a 4% increase in operating profit to $358 million [11][12] - Adjusted diluted EPS rose by 12%, and free cash flow increased by 34% to $254 million [12][14] - The overall performance was driven by strong growth in the electrical segment and grid infrastructure, despite a decline in grid automation sales [12][16] Business Line Data and Key Metrics Changes - In the utility segment, sales increased by 1% to $944 million, with operating profit remaining stable at $242 million [15] - The grid infrastructure unit grew at high single digits, with strong performance across transmission, substation, and distribution markets [15][16] - The electrical segment saw double-digit sales growth of 10% and a 17% increase in operating profit, with 8% organic growth across end markets [18][19] Market Data and Key Metrics Changes - The utility market is experiencing robust project pipelines, particularly in substation and transmission markets, while distribution markets benefit from ongoing hardening and resiliency activities [27] - The electrical solutions market is expected to remain strong in data centers and light industrial sectors, although macroeconomic uncertainty may impact non-residential construction and heavy industrial segments [27] Company Strategy and Development Direction - The company is focused on capital allocation strategies that include acquiring high-growth, high-margin businesses, exemplified by the recent acquisition of DMC Power [7] - The strategy emphasizes simplifying operations to drive productivity and long-term margin expansion [5][6] - The company is positioned at the intersection of grid modernization and electrification, anticipating strong performance driven by megatrends [6][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver strong performance in 2026 and beyond, citing normalization of supply chain dynamics and robust market positions [6][26] - The company raised its full-year 2025 outlook, expecting operational improvements to offset lower organic growth [6][20] - Management highlighted the importance of managing costs effectively while maintaining pricing power in the face of inflation [5][12] Other Important Information - The company announced the retirement of CFO Bill Sperry at the end of the year, with Joe Capozzoli set to succeed him [8][9] - The DMC Power acquisition is expected to contribute approximately $0.20 to adjusted earnings per share in 2026 [7] Q&A Session Summary Question: Insights on 2026 growth expectations - Management acknowledged the potential for strong growth in 2026 but emphasized a cautious approach to planning resources based on long-term guidance [30][31] Question: Details on September-October order strength - Management noted broad-based order strength in the T&D sector, indicating a positive trend for future growth [40][41] Question: Sustainability of the lower tax rate into 2026 - The lower tax rate is driven by an international acquisition restructuring and is expected to normalize next year [42] Question: Clarification on utility segment recovery - Management confirmed that the organic revenue guidance reduction was entirely within the utility segment, with recovery timing shifting as expected [45] Question: Commentary on pricing and margin expectations for next year - Management indicated that pricing for the year is expected to be in the 3% range, with balanced contributions from both segments [51][62]