CTS CORPORATION

Recommendation history

• Q3 2023HoldHOLD: Sunstone's earnings were broadly in line, with Q1 adjusted EBITDAre of $55 million and 2024 guidance of $242-$263 million, or $0.84-$0.94 adjusted FFO per share. The 2025 setup is credible—Westin Washington, DC, Marriott Long Beach, Hyatt San Antonio and Andaz Miami Beach could drive double-digit EBITDA growth—but the thesis remains execution- and macro-dependent, while 2024 absorbs $13-$15 million of renovation-related earnings disruption.
• Q2 2023HoldHold: Teva reaffirmed 2019 adjusted EPS of $2.20-$2.50 and EBITDA of $4.4-$4.8 billion, but Q1 revenue fell 15% to $4.3 billion, adjusted EPS fell 36% to $0.60, and net debt remained high at $26.7 billion, or 5.45x EBITDA. Generics stabilization, AJOVY and AUSTEDO growth, and restructuring support a 2020 recovery thesis, but COPAXONE erosion, AJOVY gross-to-net above 40%, recurring impairments, opioid litigation, and limited visibility beyond cost cuts keep the shares from being a clean buy.
• Q3 2022BuyBuy: Verisk delivered a strong Q2, with revenue up 14.9% to $601 million, organic constant-currency revenue up 7.4%, adjusted EBITDA up 8.9%, and adjusted EPS up 29.3% to $1.06. Insurance remains the engine—8.4% organic growth and 56.6% EBITDA margin—while the key tension is that Financial Services and Energy are still below potential, with TSYS integration delays and Argus regulatory-related product changes obscuring growth.
• Q2 2022HoldHold: the combination produced $490 million of 2024 pro forma revenue and $82 million of adjusted EBITDA, but underlying performance was broadly flat and management provided no quantified 2025 revenue or EBITDA outlook. The $45 million synergy target and improving second-half thesis offer upside, yet remain offset by a subdued market, integration disruption, largely flat subscription renewals, and approximately $416 million of convertible notes against $354 million of cash and short-term investments.
• Q2 2020HoldHold: Swift’s pricing remains strong, with truckload revenue per loaded mile up 3.7% in Q2 and expected to reach 4%–5% in the second half, but earnings visibility deteriorated sharply after management introduced its largest-ever driver wage increase. The recovery case depends on difficult execution across Central, dedicated and intermodal; refinancing may add $0.04–$0.05 of EPS in 2H14 and $0.18–$0.19 in FY2015, but that is not enough to offset the near-term uncertainty.
• Q2 2016HoldHold: CTS delivered Q2 adjusted EPS of $0.26, 34.9% gross margin, $135 million of new awards and reduced debt by $30.5 million, but sales were only $98.7 million and management conceded the high end of its FY16 revenue range is unlikely. The bull case is improving margins, Single Crystal accretion and automotive share gains; the bear case is persistent HDD weakness, softer auto/commercial vehicle demand and delayed restructuring benefits.
• Q1 2016No clear callHold: Ensco delivered Q2 EPS of $1.41 including the ENSCO 69 loss, $512 million of revenue, and 72% jackup utilization, but guided to roughly 12% sequential revenue contraction in Q3 as utilization and day rates deteriorate. The long-term deepwater thesis is attractive—deepwater revenue is projected at approximately $280 million in 2009 and $600 million in 2010, supported by roughly $1 billion of cash and only 5% debt-to-capital—but near-term jackup oversupply, uncertain recovery timing, and execution risks keep this from being a clean buy.