IDEX Corporation

IDEX experienced double-digit organic growth in the last quarter and achieved strong profitability and sales that were beyond market expectations. It experienced difficult supply chain environments as well as unprecedented inflation. In its Fluid and metering technology segment, the industry day rates were steady in the quarter. The company continues to see positive signals from both its distributors and OEMs. IDEX is on its next phase of automation at Banjo and views continued improvement in efficiencies and delivery. In its energy business, IDEX sees favorable demand for natural gas production, energy exports, and continued oil price support. The company’s life sciences and analytical instrumentation businesses continue to grow due to strong next-generation sequencing applications and the continued expansion of cell-based therapies in several mass spec and chromatography applications. The targeted growth initiatives of IDEX, along with a wide variety of applications from energy-efficient fuel cells to space and satellites, continue performing well. There is some slowing in the semiconductor market driven by declining consumer chip spending and higher memory device inventory levels. Overall, signs of slowing demand are seen in biopharma and pharma, particularly around large projects. Global auto production is stable and its presence in premium vehicle segments in hybrids and EVs is driving a faster recovery. The rescue business of the company remains positive with strong NPD. We give IDEX Corporation a ‘Hold’ rating with a revised target price.