DPC's (DPC) cast components for aerospace engine and industrial gas turbine clients are in high demand, but the company's favorable demand environment is largely priced in by investors, Morgan Stanley said in a note Monday.
The investment firm noted that DPC is operating in a "supply-constrained industry" with "few other scaled, integrated casting providers, and only one other publicly-traded provider."
DPC also has multiyear strategic client agreements that give it "revenue visibility and support capex requirements to expand capacity," the note said.
Additionally, the "significant levels of technical knowledge and certifications required for manufacturing provide high barriers to entry," Morgan Stanley said.
However, DPC shares have increased about 40% since the company's IPO at $33 per share on June 25, the investment firm said, adding that, while the company has "many compelling attributes" these are "already largely priced in by the market at current trading levels."
Morgan Stanley started coverage of DPC with an equalweight rating and $47 price target.
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