Atmus Filtration Technologies (ATMU) Benzinga·2025-03-27 19:40Core Insights - Atmus Filtration Technologies Inc. has strong growth potential due to its ability to expand in core and adjacent markets, as noted by JPMorgan analyst Tami Zakaria [1] - The stock price forecast has been raised from 46, maintaining an Overweight rating [1] Financial Performance - Atmus Filtration earns over 80% of its revenue from the aftermarket, yet its valuation is currently discounted compared to peers [2] - The planned move into industrial filtration is expected to narrow this valuation gap over time, aligning it with direct filtration competitors [2] Strategic Initiatives - Management is confident in offsetting potential cost increases from tariffs by adjusting prices in the aftermarket if current exemptions are removed after April 2 [3] - The company intends to implement flexible pricing adjustments to counter any tariff-related cost hikes [3] Regulatory Environment - The possible cancellation of the 2027 NOx regulation is unlikely to significantly affect this year's industry outlook, but it may lead to a more balanced production schedule in the coming years [4] - Atmus Filtration expects the NOx regulation to still go into effect, although the extended warranty requirement might be eliminated [4] Growth Projections - Management aims for organic revenue growth at approximately 4%, which is expected to generate a 25% incremental margin [5] - Further growth potential is anticipated from significant wins with major OEMs and acquisitions in the industrial filtration market [5] - Estimates have been adjusted upward due to the latest foreign exchange rates [5]