Gates Industrial (GTES) Stock Forecast & Price Target

Gates Industrial Corp PLC has demonstrated steady growth potential, particularly in its Power Transmission segment, which has shown organic growth of 2.3% year-over-year. The company's significant increase in new product introductions, rising from low-single digits in 2017 to mid-to-high teens percentage in 2023, underscores its commitment to innovation and market expansion. Additionally, with a robust opportunity pipeline approaching $150 million in the datacenter market and improved pricing realization expected in the second half of 2025, Gates is well-positioned for accelerated revenue growth moving forward.

Gates Industrial Corp PLC has reported a concerning decline in organic sales, with a 0.6% drop in 2Q25, which fell short of both internal estimates and consensus expectations, indicating weaker performance across its key segments. Specifically, the Power Transmission segment, which is the primary revenue generator, experienced a significant decline driven by lower demand from industrial OEMs and reduced commercial truck production forecasts, leading to negative volume contributions that were approximately 600 basis points worse than initially anticipated. Additionally, the Fluid Power segment also faced a downturn, with organic sales decreasing by 2.5% year-over-year, compounding the challenges of operating deleverage and margin pressure for the company.