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DOV Gains From Healthy Bookings Despite Low Vehicle Service Volumes
ZACKSยท 2025-09-26 18:50
Core Insights - Dover Corporation (DOV) is benefiting from strong order bookings, cost-reduction initiatives, and margin execution, while focusing on capacity expansions and productivity improvements [1][4][9] - The company has raised its 2025 outlook, expecting adjusted EPS of $9.35-$9.55 and year-over-year revenue growth of 4-6% [4][9] Business Performance - Dover has recorded positive organic booking growth for seven consecutive quarters, driven by strong demand and effective production despite operational challenges [3][9] - The Engineered Products segment has faced lower volumes in vehicle services, which is expected to continue impacting margins [2][10] Strategic Actions - The company is executing restructuring programs to align costs with market conditions, including facility consolidations and headcount reductions [5][9] - Recent acquisitions, such as those of Carter Day International's petrochemical division and Site IQ LLC, enhance Dover's capabilities in the plastics and fueling sectors [6][7][9] - Divestitures, including the sale of the De-Sta-Co business and ESG Group, allow Dover to focus on core platforms and reduce exposure to cyclical capital goods [8][9] Financial Outlook - Selling, general, and administrative expenses have increased by 6.3% year-over-year in 2024, with expectations of continued high costs in 2025 due to input cost inflation [11] - Dover's stock has underperformed, losing 13.1% over the past year compared to the industry's growth of 1.8% [12]