Northland Sees Graham Corporation (GHM) Near Full Value as Order Growth Slows

Graham Corporation (NYSE:GHM) is included among the 12 Best HVAC Stocks to Buy Now.

On January 27, Northland downgraded Graham Corporation (NYSE:GHM) to Market Perform from Outperform and raised its price target to $80 from $71. The firm remains constructive on Graham’s acquisition of FlackTek, which produces proprietary material processing solutions. Still, the analyst said the stock now appears close to full value. That view is reinforced by management’s indication that orders could slow to around $50M in the second half of 2026, down sharply from $209M in the first half. Taken together, the analyst said, “a better entry could emerge.”

A day earlier, on January 26, the company announced it had acquired FlackTek Manufacturing, LLC and FlackTek Sales, LLC, together known as FlackTek. FlackTek is widely regarded as a pioneer in advanced mixing and material processing solutions.

Under the terms of the deal, Graham acquired 100% of FlackTek’s equity for $35 million. The payment consisted of 85% cash and 15% in equity, issued through 75,818 shares of Graham’s common stock. The agreement also includes the potential for up to $25 million in additional performance-based cash earnouts over four years starting in fiscal 2027. These earnouts are tied to progressively higher adjusted EBITDA targets. The base purchase price reflects roughly 12x FlackTek’s projected adjusted EBITDA for 2026.

Management believes the FlackTek acquisition meaningfully broadens Graham’s ability to address complex customer needs. Many of these challenges now require integrated solutions that cut across rotating machinery, vacuum environments, thermal management, and advanced materials processing.

Graham Corporation (NYSE:GHM) operates as a global leader in the design and manufacture of mission-critical fluid, power, heat transfer, and vacuum technologies. Its products serve customers across the Defense, Energy & Process, and Space industries.

While we acknowledge the potential of GHM as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 13 Companies that Just Started Paying Dividends and 10 Best Monthly Dividend Stocks to Buy Now

Disclosure: None.