Nordson (NDSN) finished a down session higher after reporting results, a lesser followed Industrial that tends to screen favorably. NDSN will host an Investor Day 10-3-2024. Nordson did a key deal for Atrion in May expanding its medical solutions portfolio.

NDSN’s monthly chart has consistently bounced at AVWAP off the 2020 lows and has a measured move to $310 on a break to new highs with all key moving averages rising.

Nordson is an innovative precision technology company that engineers, manufactures and markets differentiated products and systems used for precision dispensing, applying and controlling of adhesives, coatings, polymers, sealants, biomaterials, and other fluids, to test and inspect for quality, and to treat and cure surfaces and various medical products such as: catheters, cannulas, medical balloons and medical tubing. NDSN serves a wide variety of consumer non-durable, consumer durable and technology end markets including packaging, electronics, medical, appliances, energy, transportation, precision agriculture, building and construction, and general product assembly and finishing.

NDSN sees precision solution growth driven by new applications including electric vehicle battery, automotive electronics, and fabric bonding. Medical Fluid Solutions growth is seen driven by the ageing population, a move to non-invasive surgical techniques and OEM outsourcing. Advanced Tech Solutions growth is seen driven by 5G, AI, Big Data, Auto Electronics and High Performance Computing.

NDSN has a market cap of $14.65B and trades 24.5X Earnings, 18.6X EBITDA and 25.8X FCF with a 1% yield. NDSN’s EV/EBITDA is in the 79^th percentile of its 10-year range while margins are near record highs. NDSN’s 2020-2025 outlook is for a 7%+ revenue CAGR, 10% EBITDA CAGR and 13%+ ROIC with 30% EBITDA margins.

On the latest earnings call, Nordson is seeing strong momentum in its optical and acoustic product lines, specifically in its CyberOptics business, which is used in the front end of the semiconductor manufacturing business. The company has also seen growth in its new products like WaferSense, which is used in the semiconductor processing manufacturing steps. The ATS segment will benefit from increasing demand for advanced chips in support of AI, automotive electronics, onshoring, CHIPS Act, as well as the broader electronics CapEx spending cycle.

Nordson’s core strengths remain a diversified portfolio close to the customer business model, high level of recurring revenue, NBS Next growth framework, and a commitment to innovation.