Mettler-Toledo: Long-Term Drivers Remain Strong and Steady; Fair Value Estimate Raised to $1,200

We are refreshing our thoughts on Mettler-Toledo and maintaining our narrow moat rating based on its leading market share across product lines and geographies, its high-quality brand name, and modest switching costs inherent in its business. After reevaluating Mettler’s ability to weather market cyclicality and protect both top and bottom lines relatively well in economic downturns, we lowered our cost of capital assumptions to 6.9% from 8.6%, previously. As a result, our fair value estimate rose to $1,200 per share from $880. We view shares as modestly overvalued.