Materion (MTRN) is set to grow further due to easing China tariffs, improving demand in semiconductors, and momentum in aerospace and defense, KeyBanc Capital Markets said in a note Thursday.
KeyBanc analysts increased their 2025 and 2026 earnings per share forecasts due to easing US-China tariffs, a recovering semiconductor cycle, ongoing strength in aerospace and defense, and management's focus on boosting margins across the cycle. They added that they believe investors will be drawn to Materion's strategic beryllium operations, especially as the US government emphasizes domestic critical mineral production.
The analysts increased their 2025 EPS estimate to $5.04 from $4.80, with Q2 EPS expected at $1.16, which includes a $0.10 to $0.15 per share impact from China tariffs. With recent tariff relief, reciprocal duties down from over 100% to between 30% and 35%, the analysts expect tariff-related EPS headwinds in H2 to drop to about $0.20 from $0.45.
Almost $100 million in annual US shipments to China, half of which support semiconductor production, should revive as customer orders resume, KeyBanc said. Additionally, a recent Asian acquisition to produce tantalum targets should further Materion's regional positioning and margins, according to the note.
KeyBanc upgraded the stock to overweight from sector weight and set a $112 price target.
Shares of Materion were up 5.7% in recent trading.
Price: 93.71, Change: +5.08, Percent Change: +5.73
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