ESAB changes
Pick any two versions below to diff them.
- Price
- $65.63 → $66.36(+1.1%)
- Discount
- 40% to 51% → 39% to 50%(−1.0 pts)
- Next earnings
- 2026-11-06 → 2026-11-04
- Next earnings is estimate
- Yes → No
- Thesis
- ESAB trades at a discount because the market doubts that it can grow while its main markets are weak, and because it took on more debt to buy Eddyfi. Core organic sales fell 1% in Q1 2026 and grew only 2.5% in Q2 2026. The war in Iran and the closing of the Strait of Hormuz cut sales in the Middle East and raised logistics and material costs. Core adjusted EBITDA margin fell to 19.5% in Q2 2026, and the 2026 core adjusted EPS outlook fell to $5.40 to $5.50 from $5.70 to $5.90, because the Eddyfi debt and new shares cost more than Eddyfi earns in its first year. Total debt rose to $2.4 billion at July 3, 2026, from $1.2 billion at the end of 2025. For the gap to close, core organic sales must grow inside the 2% to 4% range, the margin must recover as price increases offset the higher costs, Eddyfi must add growth at a higher margin as planned, and ESAB must reduce its debt from cash flow. The first test is the Q3 2026 report, expected in early on November 4, 2026. The 2027 outlook, due in February 2027, will show the first full year with Eddyfi. If margins recover and debt falls, the gap can close over the next four to six quarters. The main risk is a longer conflict in the Middle East or a weaker industrial economy that keeps volumes down.
- Checkpoints
- Nov 64, 2026 (estimate): Q3 2026 results: organic growth and margins. Pending. Watch: Core organic growth inside the 2% to 4% range, a higher core adjusted EBITDA margin than in Q2 and the 2026 outlook kept pass; another outlook cut or falling volumes fail. Feb 2027 (estimate): Full-year 2026 results and 2027 outlook. Pending. Watch: A 2027 outlook with core adjusted EPS growth, Eddyfi growth at a higher margin and lower debt passes; flat earnings or debt that does not fall fails.