Morningstar

Dover's Rightsizing Plan Takes Shape

New CEO Rich Tobin unveiled plans to cut expenses by $100 million, but we're not making material changes to our fair value estimate as a result.

Securities In This Article
Dover Corp
(DOV)

Narrow-moat-rated

Tobin demurred from providing analysts updated 2018 or 2019 guidance but expects to deliver an update on Dover’s footprint moves to the market at the start of 2019. Even so, we don’t expect to materially change our $86 fair value estimate. Tobin was clear that this was not a five-year plan, and the latest news doesn’t alter our long-term fundamental view of Dover. As such, we are taking a wait-and-see approach to these announced actions, particularly as we’ve previously modeled in cost savings to the firm’s SG&A line with corresponding offsets in the form of increased corporate costs.

That said, we are pleased with Tobin’s candor during the call. He was not afraid to point out Dover’s recent shortcomings, particularly as it concerns execution. For example, Dover Fueling Solutions has had several missteps with footprint consolidation in Europe, which has not gone according to plan. As a result, the company has incurred additional frictional costs, which have spilled over into operations in the form of logistics and overtime pay.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

More in Stocks

This Cheap Stock Is Still a Buy Even After 50% Rally

Shares of this wide-moat company look 36% undervalued today.
Ivan Su

10 Top-Performing Dividend Stocks of Q3 2024

IBM and Entergy are among the quarter’s high-yielding winners.
Bella Albrecht

33 Undervalued Stocks

Here’s the new list of Morningstar’s top underpriced analyst picks to buy for the fourth quarter of 2024.
Susan Dziubinski

About the Author

Joshua Aguilar

Director
More from Author

Joshua Aguilar is a director, AM Resources, for Morningstar*. After previously covering multi-industrial conglomerates and financial services firm, he is now assuming coverage of exploration and production firms in the oil and gas industry.

Prior to joining Morningstar in 2016, Aguilar was a practicing business transactional attorney in Florida. Aguilar joined Morningstar in 2016 as an Associate on the Financials team, was promoted to Analyst on the Industrials team in 2018, and Senior Analyst in 2022. He’s also served as our Associates Coordinator since 2021 and led our diversity efforts as DEI co-chair since 2020. Aguilar has served as a key mentor to several Associates on their path to Analyst. He’s also hosted a Morningstar earnings townhall, participated in Analyzing MORN, and been a strong contributor through both client interactions and his GE stock call. Josh co-authored an Outstanding Research Achievement (ORA)-winning piece with Kris Inton on CEO compensation in 2021. He’s also taught the model to new hires for many years as part of the Valuation Committee.

Aguilar graduated Magna cum laude with a B.A. in political science and criminology from the University of Florida. He also has an MBA from Rollins College and a J.D. from Wake Forest University. Aguilar remains an active member of the Florida Bar Association.

* Morningstar Research Services LLC (“Morningstar”) is a wholly owned subsidiary of Morningstar, Inc

Sponsor Center