Vertiv's (VRT) new 2030 targets, including a 20% to 22% organic revenue growth, are "impressive," but some conservatism is still "baked in" to the outlook, RBC Capital Markets said in a Thursday note.
RBC said it sees an achievable bull case for $21 to $22 EPS in 2030 when including incremental margins of between 30% to 35%, potential acquisitions and stock buybacks. This compares to management's assumption of 30% margins, the RBC analysts said.
"Given the North America datacenter industry's implied 12-year construction backlog, we expect Vertiv's hyper-growth can continue," RBC said.
Additionally, new product investments in pre-fabricated, converged power as well as thermal platforms like OneCore and SmartRun should help deepen Vertiv's competitive moat, according to the note.
RBC maintained its outperform rating with a $435 price target on the company's stock.
Price: $326.53, Change: $+10.86, Percent Change: +3.44%