Franklin Electric upgraded at D.A. Davidson on AI data center, rare-earths growth

What happened

D.A. Davidson upgraded Franklin Electric to Buy from Neutral and raised its price target to $135 from $105. It cited opportunities supplying pumps, motors and electronic drives for liquid-cooled AI data centers, plus a pending Challenge Pumps acquisition expected to roughly double the critical minerals business.

Confirmed

Global impact / market context

The upgrade rests on growth beyond Franklin Electric’s traditional residential water and agricultural markets. If data-center cooling sales rise as the firm expects, they could add revenue; completing Challenge Pumps could also expand mining-equipment sales, though the acquisition remains pending.

Analyst inference

D.A. Davidson estimates data-center products will produce $40 million to $50 million in revenue this year and could grow severalfold by decade’s end. It expects faster growth in 2027 and 2028 as manufacturers expand liquid-cooling capacity; these are forecasts, not reported results.

Confirmed

What to watch

1. Watch for reported data-center product revenue against D.A. Davidson’s $40 million to $50 million estimate for this year, and whether sales growth follows its longer-term forecast. Analyst inference
2. Track whether the pending Challenge Pumps acquisition closes and whether the critical minerals business reaches the expected annualized revenue of at least $100 million. Analyst inference
3. The analyst’s $135 price target is higher than the prior $105 target; the article says it implies approximately 42% upside from the October 30 closing price. Confirmed

Evidence

• seekingalpha.com