ESAB Corp (ESAB) Stock Forecast & Price Target

ESAB is viewed positively because its mix is shifting toward higher-growth, higher-margin businesses, with about 50% of pro forma sales now coming from equipment, gas control, and Eddyfi versus 38% in 2016, while core operating margin has already risen from the low teens in 2016 to 19.0% as of 1Q26. The Eddyfi acquisition adds roughly $270M of estimated 2026 revenue, around 65% adjusted gross margin, 30% adjusted EBITDA margin, and 55% recurring revenue, expanding ESAB into inspection and continuous monitoring and broadening exposure to nuclear, infrastructure, energy, and aerospace and defense. Management’s roughly $450M commercial funnel, $20M synergy target, and expected deleveraging from 3.7x to 2.3x by FY27E support the case that ESAB can improve cash generation, reduce cyclicality, and earn a structurally better valuation.

ESAB is pressured by a clear gap between strong top-line growth and weak per-share execution, as 2Q26 revenue of $807.6 million beat expectations but core adjusted EPS of $1.35 missed consensus and FY26 EPS guidance was cut to $5.40-$5.50. The market is also discounting the Eddyfi acquisition because it raised interest expense, added dilution, and left core adjusted EBITDA margin down 90 basis points to 19.5% while the company still carries about $2.32 billion of net debt, or roughly 3.7x FY26 adjusted EBITDA. Geopolitical concentration in the Middle East, which represents about 7%-8% of revenue, and continued Russia-related reporting uncertainty further support a valuation discount until leverage falls and margin recovery becomes visible.