Teledyne Technologies' (TDY) healthy book-to-bill rates and a positive organic sales inflection in Q3 spurred optimism on growth prospects, UBS Securities said Tuesday in a report.

"We see a strengthening outlook for short cycle activity in 2025, and we think accelerating organic growth will restore sentiment and support multiple rerating," the firm said.

UBS resumed coverage of Teledyne with a buy rating and $585 price target, up from $525.

Despite the company's "strong track record of compounding growth via M&A driving consistent double-digit [earnings per share] growth," the stock currently trades at a relative discount to peers and historical valuation, the report said.

UBS forecast a 6% compound annual growth rate in sales through 2026, compared with the consensus estimate of 5%.

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