Modine Manufacturing has an opportunity to capitalize on the growing data center buildout, according to KeyBanc Capital Markets. The investment bank initiated coverage of the thermal management stock with an overweight rating and a $125 per share price target, implying about 29% upside from Thursday’s $97.07 close.
The company is shifting its focus towards “high growth climate opportunities” in data centers, where it has an attractive position due to its high-efficiency cooling systems. Data centers are crucial for artificial intelligence, large language models, and other AI programs that require vast amounts of computing power.
Modine’s data center business has driven the company’s recent earnings improvements, with a forecasted compound annual growth rate of 39% from fiscal 2022 through 2026. The company expects its data center business to represent around 30% of sales in FY26E and maintain its organic growth momentum, driven by end market growth and ramping cooling needs.
KeyBanc believes the current price level is a compelling entry point, given the strong transformation runway and accurately valued data center business. Despite recent share pullbacks, shares have rallied 23% in the second quarter, and the investment bank’s analysis suggests a promising outlook for Modine Manufacturing.
Source: https://www.cnbc.com/2025/06/13/keybanc-touts-thermal-management-stock-benefiting-from-data-centers.html