Gates Industrial (GTES) Stock Forecast & Price Target

Gates Industrial Corp PLC has demonstrated resilience in its revenue streams, with the Power Transmission segment seeing a modest organic sales increase of 0.6% year-over-year, while growth in the Fluid Power segment is expected to accelerate, driven by a substantial opportunity pipeline approaching $150 million in the datacenter market. The company has significantly ramped up its new product innovations, evidenced by an increase in new product introductions from low-single digits in 2017 to mid-to-high teens percentage in 2023, indicating a robust capacity for ongoing growth. These foundational elements, combined with anticipated improvements in pricing realization, position Gates Industrial Corp favorably for enhanced organic revenue growth in the latter half of 2025 and into 2026.

Gates Industrial Corp PLC is experiencing significant challenges in its revenue generation, particularly within its key Power Transmission segment, which continues to face negative core growth in North America at -1.3% year-over-year due to weakened industrial demand and lower commercial truck production forecasts. The company’s organic sales for 2Q25 declined by -0.6%, falling short of expectations and further exacerbating operating deleverage, especially given the negative volume contribution that has been approximately 600 basis points below projections over the past two years. Additionally, the Fluid Power segment also reported a decline of -2.5% year-over-year, indicating persistent difficulties in both of its primary operating areas, ultimately contributing to a negative outlook for the stock.