MOD · Modine Manufacturing
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $125.45
Note written ·
Price against the kill line
Closed 8.1% through its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $125.45, on record since 11 November 2026. The shares are down 32.0% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $125.45, the close before the 4 November 2026 reaction to the quarterly results (3 November 2026), which would show the shares leading the S&P 500 again. Data Centers gross margin above the 24.4% reported a year earlier would also show the shares leading.
Research onlyNot in the portfolio.
Catalyst
Key figures from the filings · Consumer Discretionary
Quarter to 30 September 2026, filed 4 November 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 994
- Revenue, change on a year (%)
- +34.6
- Gross margin (%)
- 20.7
- Operating margin (%)
- 9.8
- Free cash flow, four quarters ($M)
- −9.9
- Net cash, cash less debt ($M)
- −575
- Price to earnings (×)
- 55.6
- Enterprise value to sales (×)
- 2.1
All filed numbers
What Modine Manufacturing reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Gross margin (%) | Operating margin (%) |
|---|---|---|---|---|
| first filed | 994 | +34.6 | 20.7 | 9.8 |
| first filed | 874 | +28.0 | 20.8 | 8.6 |
| first filed | 954 | +47.5 | 22.5 | 10.9 |
| first filed | 805 | +30.5 | 23.1 | 11.1 |
| first filed | 739 | +12.3 | 22.3 | 9.9 |
| first filed | 683 | +3.2 | 24.2 | 11.1 |
| Pre-tax income ($M) | 88.0 |
| Net income ($M) four quarters: 130 | 30.0 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | +0.2 |
| Operating cash flow ($M) | 163 |
| Capital spending ($M) | 172 |
| Free cash flow ($M) | −9.9 |
| Cash and short-term investments ($M) | 151 |
| Debt ($M) long-term debt and finance leases plus short-term borrowings | 726 |
| Net cash, cash less debt ($M) | −575 |
| Deferred revenue ($M) | 209 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 795 |
| Inventory ($M) | 698 |
| Shareholders' equity ($M) | 1,231 |
| Market value ($M) | 7,217 |
| Enterprise value, market value plus net debt ($M) | 7,792 |
| Enterprise value to sales (×) | 2.1 |
| Enterprise value to operating income (×) | 21.3 |
| Price to earnings (×) | 55.6 |
| Price to book value (×) | 5.9 |
| Free-cash-flow yield (%) | −0.1 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 4.7% of shares outstanding sold short, 1.8 days of average trading to cover, −19.6% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $776K |
| 12 monthsfrom | $0 | $40.4M |
The thesis
Modine Manufacturing is more likely to lag the S&P 500 over the next three months. Its data-center cooling sales are growing fast, but the gross margin on them has not recovered, and the 18 November 2026 Analyst and Investor Day settles whether new financial targets change that.
Modine reported fiscal 2027 second-quarter results on 3 November 2026 for the quarter ended 30 September 2026. Net sales were $994.4 million, up 35% from $738.9 million a year earlier. Data Centers sales were $439.7 million, up 95%. Data Centers gross margin was 19.7%, down 4.7 percentage points from a year earlier and below the 20.2% of the June quarter (company releases, 3 November 2026 and 29 July 2026). Adjusted earnings per share were $1.35, below the consensus estimate Benzinga cited.
Management will present at the event in Chicago on 18 November 2026, with CEO Neil Brinker and CFO Mick Lucareli outlining growth plans and financial goals after the Performance Technologies spin-off (company announcement, 14 September 2026). A live webcast runs on investors.modine.com.
The shares closed at $106.10 on 12 November 2026, 67.2% below the 52-week high of $323.25 reached on 26 May 2026. The three-month change is −45.0%. That decline already prices a good deal of margin disappointment, and four brokerages still held targets between $160 and $225 after the results.
Bullish and bearish views on Modine Manufacturing Co
The bull case on Modine Manufacturing Co (MOD), in brief: demand and backlog are rising. The bear case: cooling margin did not recover.
Bull case
- Demand and backlog are rising. CEO Neil Brinker called demand "very robust" and cited record Data Centers orders and backlog (company release, 3 November 2026). Data Centers sales rose 95% to $439.7 million, led by North American hyperscale customers.
- Revenue guidance was raised. Modine now expects fiscal 2027 net sales of $3.1 billion to $3.2 billion for the continuing business, which excludes Performance Technologies (company release, 3 November 2026).
- Adjusted profit grew with sales. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $136.2 million, up 31% from $103.8 million a year earlier (company release, 3 November 2026).
- New chiller capacity is starting up. Modine announced on 11 November 2026 that it began commercial production of Airedale chillers at a new facility in Grand Prairie, Texas. The plant belongs to a $100 million North American data-center capacity expansion Modine announced in July 2025.
- Analyst targets sit above the price. After the results, KeyBanc's target is $225, Oppenheimer's is $215, Cantor Fitzgerald's is $178 and UBS's is $160, with UBS keeping a Buy rating on 6 November 2026 (Benzinga, 4 November to 6 November 2026). All four exceed the $106.10 close of 12 November 2026.
Bear case
- Cooling margin did not recover. Data Centers gross margin was 19.7%, against 24.4% a year earlier, with higher material, component and tariff costs cited as the cause. Consolidated gross margin was 20.7%, down 1.6 percentage points (company release, 3 November 2026).
- Earnings missed despite the sales beat. Adjusted EPS of $1.35 was below consensus estimates reported by Benzinga on 3 November 2026, even though net sales of $994.4 million exceeded them.
- Analysts cut targets after the report. KeyBanc lowered its target to $225 on 4 November 2026. Cantor Fitzgerald cut to $178 and Oppenheimer to $215 on 5 November 2026. UBS cut to $160 on 6 November 2026.
- The outlook does not compare with the old one. The new adjusted EBITDA range of $470 million to $500 million excludes Performance Technologies. The range set on 29 July 2026 was $650 million to $680 million and included it.
- Customer concentration remains. Hunterbrook Media reported on 21 August 2026 that Google and Amazon are anchor data-center customers, so a change in either one's purchases would weigh on Data Centers sales.
Price setup
The shares closed at $91.39 on 5 November 2026, their 52-week closing low. They then rose to $96.61 on 6 November 2026 and $106.15 on 9 November 2026, and have closed between $103.07 and $106.67 on each session since (10 November to 12 November 2026).
The 50-day average is $154.46 and the 200-day average is $199.18, both as of 12 November 2026. The last close sits well below each of them, so the shares have not yet regained either average. A close under $91.39 would set a new 52-week closing low and extend the post-results decline.
SEC filings since the report show no open-market insider purchases. The Form 4 filed on 4 November 2026 reports a grant of 328 shares to Michael Mahan, President of Data Centers, dated 2 November 2026. Modine filed its quarterly report on Form 10-Q on 4 November 2026.
Catalysts ahead
- 18 November 2026: Modine Analyst and Investor Day in Chicago, with a live webcast at investors.modine.com. Management is to present longer-term growth plans and financial targets after the Performance Technologies spin-off; Data Centers margin goals are the open question after the 19.7% result.
- ~February 2027 (est.): Fiscal 2027 third-quarter results. Shows whether Data Centers gross margin moves above the 19.7% of the September quarter and whether the raised net sales outlook holds.
What would change the view
A daily close above $125.45, the close before the 4 November 2026 reaction to the quarterly results (3 November 2026), which would show the shares leading the S&P 500 again. Data Centers gross margin above the 24.4% reported a year earlier would also show the shares leading.
This line was crossed on 13 November 2026: the shares closed at $135.66, above $125.45.
What it trades with
Modine sells cooling equipment to hyperscale data-center operators, so its orders follow the capital spending plans of large cloud companies. Other data-center infrastructure suppliers, including power and cooling equipment makers, tend to move with MOD when those plans change. Gentherm now owns the former Performance Technologies business, so Modine's reported results no longer include it.
The evidence, claim by claim (8)
- Net sales were $994.4 million, up 35% from $738.9 million a year earlier; Data Centers sales were $439.7 million, up 95%. Modine fiscal 2027 second-quarter release · as of
- Data Centers gross margin was 19.7%, down 4.7 percentage points from a year earlier; consolidated gross margin was 20.7%, down 1.6 percentage points. Modine fiscal 2027 second-quarter release · as of
- Adjusted EPS was $1.35 and adjusted EBITDA was $136.2 million, up 31% from $103.8 million. Modine fiscal 2027 second-quarter release · as of
- Fiscal 2027 outlook for the continuing business: net sales $3.1 billion to $3.2 billion and adjusted EBITDA $470 million to $500 million, excluding Performance Technologies. Modine fiscal 2027 second-quarter release · as of
- Data Centers gross margin was 20.2% for the quarter ended 30 June 2026. Modine fiscal 2027 first-quarter release · as of
- Post-results targets: KeyBanc $225, Oppenheimer $215, Cantor Fitzgerald $178, UBS $160 (UBS kept Buy). Benzinga analyst notes · as of
- Modine began commercial production of Airedale chillers at a new facility in Grand Prairie, Texas. Modine company news release · as of
- Form 4 filed 4 November 2026: Michael Mahan, President of Data Centers, received a grant of 328 shares dated 2 November 2026. SEC Form 4 · as of
Sources
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