Modine Manufacturing (MOD) is positioned for stronger growth following its long-term capacity agreement with a major data-center customer and its ability to keep pace with accelerating demand, Oppenheimer said Thursday in a report.

The agreement, which will supply more than $4 billion of cooling systems from 2027 to 2029, strengthens Modine's vision for future production needs and supports the forecast for 50% to 70% data-center revenue growth in fiscal 2028, with contributions beginning in fiscal Q4 of 2027, the report said.

The customer has provided a $165 million upfront payment to fund capacity expansion, and Modine's normalizing capital-expenditure levels should still meet demand for additional production lines, the report said.

Oppenheimer raised its fiscal 2027 revenue estimate to $4.1 billion from $3.8 billion and its fiscal 2028 estimate to $5.2 billion from $4.8 billion. It boosted its price target on Modine stock to $325 from $271 and maintained its outperform rating.

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