Investment Review №334. Customer return

О компании

DXP Enterprises, Inc. (DXPE-US) is a leading US industrial distributor focused on maintenance, repair, and operations (MRO) solutions for the oil and gas, water and wastewater, chemical, manufacturing, construction, and power generation markets. The company offers a broad portfolio of products and services, including pumps and other rotating equipment, bearings and power transmission systems, metalworking supplies, and industrial safety means and services.

Price dynamics DXPE, $

Key Investment Thesis

• Structural growth in US infrastructure and industrial markets. A multi-year reindustrialization and infrastructure renewal cycle is underway in the U.S., supported by large government programs, private capital, and the ongoing localization of production. In 2025, more than $238 billion was invested in the construction and modernization of manufacturing infrastructure, indicating a sustained shift of capital toward the real economy rather than a one-off surge. These projects are highly capital-intensive and involve long-lived assets, which structurally increases demand for ongoing maintenance, repair, and operations (MRO) support. A distinct tailwind for DXPE’s pumping business is the US water infrastructure renewal cycle. The ASCE estimates total investment needs in potable water and wastewater / stormwater systems at roughly $1.65 trillion for 2024–2033 (about $670 billion for potable water and $983 billion for waste- and stormwater), with a significant portion still unfunded. Even partially closing this gap would likely accelerate the construction and modernization of pumping stations, water treatment plants, and wastewater facilities.
• M&A-driven strategy in the pumps business. DXP is building scale in the pumps and compressors segment through a suite of small, but regular acquisitions. In recent years the company has consistently closed several deals annually, and year-to-date it has already acquired five businesses, expanding its footprint in water, wastewater, and adjacent industrial niches. These acquisitions are integrated into the Innovative Pumping Solutions segment, now a key growth engine and a demand catalyst for the company’s MRO line. Each sold or engineered pump package converts into a multi-year stream of revenue from maintenance, parts, and upgrade, increasing the share of recurring revenue and enhancing the durability of the model.
• Attractive valuation and technical setup. Following the recent pullback, DXPE trades at roughly 14x NTM P/E versus ~20x previously, representing a notable discount to both its own history and peers (XYL at ~23x, GWW at ~22x), despite solid top- and bottom-line growth. Technically, the stock looks constructive: after the broader market rebound, DXPE shares held long-term trend support and advanced in an impulsive move, which, in our view, increases the probability of further upside.

We see roughly 25% upside in DXPE stock to our $121 price target. We rate the shares “Buy” and recommend a stop-loss around $80.