Gates Industrial Corporation Ltd. research snapshot
GTES AI stock analysis as of the August 3, 2026 data cutoff reads Gates Industrial Corporation Ltd. as an improving industrial recovery candidate. The company reported a record second quarter on July 31, 2026, with net sales of $941.6 million up 6.6% and core sales up 4.9%, record adjusted EPS of $0.44, and adjusted EBITDA margin of 22.5%, and it raised full-year 2026 guidance for core sales growth, adjusted EBITDA, and adjusted EPS. The stock jumped about 8.5% to $27.98 on the report, above all of its major moving averages, with a market capitalization of about $7.08 billion computed as $27.98 times 253.15 million shares and cross-validated against StockAnalysis.com and the Q2 2026 Form 10-Q, which lists 253,151,170 shares as of June 27, 2026. This page is informational research, not investment advice.
Current price
$27.98 at the July 31, 2026 close; $28.95 pre-market on August 3, 2026
Market cap
$7.08 billion
AI score
66 / 100
Rating
Improving industrial recovery candidate after a record Q2
Trend status
Bullish breakout above the 20-day, 50-day, 100-day, and 200-day moving averages, near the 52-week high
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Gates makes engineered power transmission belts and fluid power systems for industrial, automotive, aftermarket, and personal mobility applications, with a high replacement-demand mix that adds stability to a cyclical base. | Medium-high |
| Moat | The moat comes from a 115-year brand, distributor relationships, custom engineering, product breadth, and specification into OEM equipment. Pricing power is moderate and competitive pressure from Continental and other suppliers is real. | Medium |
| Management | CEO Ivo Jurek has run the company since the 2018 IPO under Blackstone ownership, with CFO Brooks Mallard. Insider ownership is about 1.97%. The Q2 2026 report beat estimates, guidance was raised, net leverage fell to 1.8x, and the company completed a redomiciliation to Bermuda effective 2026. | Medium |
| Financial trend | Q2 2026 net sales rose 6.6% with core sales up 4.9%, adjusted EBITDA margin hit 22.5%, adjusted EPS rose 13% to a record $0.44, and the company raised full-year 2026 guidance for core sales growth to 2.5% to 4.5%, adjusted EBITDA to $800 million to $830 million, and adjusted EPS to $1.62 to $1.70. | High |
| Valuation | At $27.98, TTM PE is about 19.9x, forward PE is about 15.4x on 2026 consensus adjusted EPS of $1.67, P/FCF is about 17.5x, and EV/EBITDA is about 12.6x. The multiple is reasonable for an industrial showing accelerating growth and falling leverage. | Medium-high |
| Technical trend | GTES closed at $27.98 on July 31, 2026, up about 8.5% after Q2 results, above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages, with 14-day RSI near 62 and the 52-week high of $29.17 overhead as the next resistance. | Medium |
| Risk level | Risk is moderate. The main risks are industrial end-market cyclicality, oil-related cost inflation that requires pricing actions, about $2.3 billion of total debt, about $2.0 billion of goodwill, agriculture weakness, and a stock that has rallied sharply from its October 2025 low. | High |
| AI confidence | High for descriptive facts and cross-checked math that matched across StockAnalysis.com, SEC EDGAR XBRL, the Q2 2026 earnings release, the Q2 2026 Form 10-Q, and the earnings call transcript. Lower for forward return estimates because industrial demand and data center ramp assumptions are uncertain. | High data confidence |
| Investment certainty | Medium certainty. The page gives a research framework and scenario ranges, not a buy or sell instruction. | Medium |
GTES AI stock forecast
The GTES AI stock forecast uses scenario math around the July 31, 2026 close of $27.98 and the 2026 adjusted EPS consensus of $1.67. A three-scenario model over three years produced a bearish area near $19, a base area near $31, and a bullish area near $42 before dividends, using adjusted EPS growth of negative 2%, 7%, and 12% and exit multiples of 12x, 15x, and 18x. These are scenarios, not price commitments.
$36 to $42
More likely if the industrial recovery broadens, personal mobility keeps growing near 25% to 30%, data center fluid power revenue ramps toward the $100 million to $200 million by 2028 target, margins approach the midterm 24.5% target, and leverage keeps falling.
$29 to $34
More likely if Gates delivers the raised 2026 guidance of 2.5% to 4.5% core sales growth, adjusted EBITDA of $800 million to $830 million, and adjusted EPS of $1.62 to $1.70, and investors hold the stock near a 14x to 16x forward multiple. The consensus price target of $33 sits in this range.
$19 to $26
More likely if the industrial recovery stalls, oil-related cost inflation outruns pricing, agriculture stays weak, data center ramp slips, or a recession compresses demand. A sustained close below the 200-day moving average near $24.57 would increase bearish probability.
GTES AI technical analysis
GTES AI technical analysis is bullish as of the August 3, 2026 data cutoff. The stock closed at $27.98 on July 31, 2026, up about 8.5% after Q2 results, above its 5-day, 20-day, 50-day, 100-day, and 200-day moving averages of roughly $26.81, $26.58, $26.66, $25.46, and $24.57. The 52-week high of $29.17 is the next resistance, and 14-day RSI near 62 leaves room before overbought territory.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $27.98 | StockAnalysis.com real-time quote at the July 31, 2026 close; market cap math uses 253.15 million shares outstanding. |
| Near support | $26.5 to $26.8 | The 5-day and 20-day moving averages near $26.81 and $26.58 form the first pullback support zone after the post-earnings breakout. |
| Next support | $24.5 to $25.5 | The 100-day moving average near $25.46 and the 200-day near $24.57 form a support cluster that aligns with the breakout area. |
| Near resistance | $29.17 to $30 | The 52-week high of $29.17 is the immediate upside cap, with the round $30 level as the next resistance. |
| 50-day moving average | $26.66 | Barchart reported the 50-day moving average near $26.66 and StockAnalysis.com near $26.56 as of July 31, 2026. |
| 200-day moving average | $24.57 | Barchart reported the 200-day moving average near $24.57 and StockAnalysis.com near $24.55, well below the current price and confirming the medium-term uptrend. |
| 100-day moving average | $25.46 | Barchart reported the 100-day moving average near $25.46 on July 31, 2026, below price and supporting the uptrend. |
| Momentum | RSI near 62, ADX near 16 | 14-day RSI was near 62.01 on Barchart and near 57.80 on StockAnalysis.com, strong but not overbought. 14-day ADX near 16.14 suggested the new trend was still developing after the rally. |
| Volume | About 1.9 million average shares | Barchart listed 20-day average volume near 1.81 million shares and StockAnalysis.com near 1.90 million on July 31, 2026, with volume spiking on the earnings day. |
| Volatility | Elevated near earnings | Barchart reported 14-day historical volatility near 54.6% and beta of 1.28, so position sizing should account for larger swings around reports and industrial data. |
| Invalidation | Close below $26.5 | A decisive close below the 5-day and 20-day moving averages near $26.5 to $26.8 would cool the short-term momentum; a close below the 200-day near $24.57 would turn the medium-term view bearish. |
GTES AI trading strategy
The GTES AI trading strategy is a rules-based research framework. It is not a personalized buy, sell, or hold recommendation. Traders should pair any setup with position sizing, stop logic, earnings dates, industrial data releases, tariff and oil-cost updates, and fresh chart data.
Watch for GTES to hold above the $26.5 to $26.8 support zone and to build volume on a move toward the $29.17 high, with the 200-day trend line near $24.57 still rising.
A daily close below the 20-day moving average near $26.58 or a failed attempt at the 52-week high should trigger a stop and review. Keep position size moderate given beta of 1.28.
If GTES pulls back toward the $24.5 to $26.8 support cluster without a thesis-changing event such as a guidance cut or margin miss, the mean-reversion opportunity increases.
Do not average down without a maximum loss rule because oil-cost inflation, tariff changes, or a demand setback can turn a support zone into a falling knife.
Track quarterly core sales growth, adjusted EBITDA margin progress toward 23.5% in the second half, personal mobility growth, data center fluid power bookings, net leverage, buybacks, and the oil-related price cost balance.
Lower confidence if core growth stalls, adjusted EBITDA margin misses the 23.5% second-half path, leverage rises, or the data center revenue ramp slips.
Investment research summary
Gates is paid to manufacture and distribute engineered power transmission belts and fluid power systems for industrial, automotive, aftermarket, and personal mobility applications, with a large replacement-demand mix that keeps equipment running.
The Gates brand, 115-year history, broad product catalog, distributor network, custom engineering, and OEM specification create a moderate moat. Replacement customers tend to stay with the same brand, but pricing power is limited by competition from Continental and other suppliers.
The thesis fails if the industrial recovery stalls, oil-related cost inflation outruns the price increases, agriculture weakness deepens, or the data center fluid power revenue takes longer to ramp. Other failure paths include goodwill impairment from the about $2.0 billion intangible balance and a demand setback that reverses the margin gains.
Management beat Q2 estimates, delivered record sales and adjusted EPS, raised full-year 2026 guidance, cut net leverage to 1.8x, bought back about $22 million of stock in the quarter, and completed a redomiciliation to Bermuda in 2026. The low insider ownership near 1.97% is a modest alignment concern.
The industrial cycle appears to be inflecting, with GTES calling it the early stages of a recovery. Personal mobility, data center cooling and fluid power, and chain-to-belt conversions are secular growth layers, but the underlying business remains tied to industrial and agricultural production.
At about $7.08 billion market cap, $405 million trailing free cash flow, and about 5.7% FCF yield, the valuation is reasonable for an improving industrial. The margin of safety depends on whether the recovery and the raised guidance are delivered without oil-cost or demand surprises.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| GTES price | $27.98 at the July 31, 2026 close and $28.95 pre-market on August 3, 2026, up about 8.5% on the Q2 report | StockAnalysis.com real-time quote | August 3, 2026 |
| Market capitalization | $7.08 billion, computed as $27.98 x 253.15 million shares and verified with financial_rigor.py at 0.04% deviation | StockAnalysis.com quote and financial_rigor.py | August 3, 2026 |
| Q2 2026 results | Net sales of $941.6 million up 6.6%, core sales up 4.9%, adjusted EBITDA of $211.4 million at 22.5% margin, record adjusted EPS of $0.44, GAAP diluted EPS of $0.67 | Gates Q2 2026 earnings release | July 31, 2026 |
| 2026 raised guidance | Core sales growth of 2.5% to 4.5% (from 1% to 4%), adjusted EBITDA of $800 million to $830 million (from $775 million to $835 million), adjusted EPS of $1.62 to $1.70 (from $1.52 to $1.68), capex of about $120 million, and free cash flow conversion of 90% or higher | Gates Q2 2026 earnings release | July 31, 2026 |
| Q3 2026 guidance | Total revenues of $880 million to $920 million, core revenues up about 5.5% at the midpoint, and adjusted EBITDA margin up 50 to 90 basis points year over year | Gates Q2 2026 earnings call | July 31, 2026 |
| Segment results | Power Transmission Q2 sales of $588.5 million up 7.0% with 22.9% adjusted EBITDA margin, and Fluid Power Q2 sales of $353.1 million up 5.8% with 21.7% adjusted EBITDA margin | Gates Q2 2026 earnings release | July 31, 2026 |
| End-market momentum | Personal mobility grew about 25%, commercial on-highway grew more than 20%, industrial OEM grew low double digits, and industrial aftermarket grew mid-single digits in Q2 2026 | Gates Q2 2026 earnings call | July 31, 2026 |
| Regional core growth | Americas up 1.5%, EMEA up 6.4%, and APAC up 11.5% on a core basis in Q2 2026 | Gates Q2 2026 earnings call | July 31, 2026 |
| Data center outlook | Data center business grew more than 2x versus the prior year quarter, with $100 million to $200 million of revenue expected by 2028 and a first sizable industrial water pump program ramping with a major U.S. server manufacturer in the second half | Gates Q2 2026 earnings call | July 31, 2026 |
| Cash flow and balance sheet | Q2 free cash flow of about $60 million, trailing 12-month FCF to adjusted net income of 94%, net leverage down to 1.8x from 2.2x, and about $22 million of buybacks in Q2 2026 | Gates Q2 2026 earnings call | July 31, 2026 |
| Cash and cash equivalents | $826.5 million as of June 27, 2026, matching SEC EDGAR XBRL (826500000) from the Q2 2026 Form 10-Q | Gates Q2 2026 Form 10-Q and SEC EDGAR XBRL | August 3, 2026 |
| Total debt | About $2.36 billion including leases per StockAnalysis.com, with current debt of $39.2 million and long-term debt of $2,194.3 million per the Q2 2026 Form 10-Q and SEC EDGAR XBRL | Gates Q2 2026 Form 10-Q and StockAnalysis.com | August 3, 2026 |
| Goodwill and intangibles | Goodwill of $2,022.4 million and other intangibles of $1,122.9 million as of June 27, 2026 | Gates Q2 2026 Form 10-Q | August 3, 2026 |
| TTM income statement | TTM revenue of $3.505 billion, gross margin near 39.7%, operating income of $465.2 million, EBITDA of $686.3 million, and net income to common of $363.5 million | StockAnalysis.com income statement | August 3, 2026 |
| Trailing free cash flow | Operating cash flow of $476.6 million, capital expenditures of $71.3 million, and free cash flow of $405.3 million over TTM | StockAnalysis.com cash flow statement | August 3, 2026 |
| Valuation check | 19.9x trailing PE, 15.4x forward PE, 2.02x sales, 2.01x book, 17.5x free cash flow, 12.56 EV/EBITDA, and about 5.7% FCF yield | StockAnalysis.com statistics and financial_rigor.py | August 3, 2026 |
| Analyst consensus | Buy with an average target of $33.00 across 11 analysts, low $28 and high $39 | StockAnalysis.com forecast | August 3, 2026 |
| Recent analyst target updates | JPMorgan $32 to $34 on August 3, RBC Capital $33 to $34 on August 3, Wells Fargo $26 to $30 on August 3, Citi $33 to $35 on August 3, Baird $37 to $39 on August 3, and KeyBanc $31 to $34 | StockAnalysis.com forecast and news feed | August 3, 2026 |
| FY2026 and FY2027 consensus estimates | FY2026 revenue estimate of $3.61 billion with adjusted EPS of $1.67, and FY2027 revenue of $3.77 billion with adjusted EPS of $1.92 | StockAnalysis.com forecast | August 3, 2026 |
| Short interest | 12.71 million shares short, 5.02% of shares outstanding, and 6.21 days to cover | StockAnalysis.com statistics | August 3, 2026 |
| 52-week range and performance | 52-week range of $20.88 to $29.17, up 11.61% over the trailing 52 weeks, and beta of 1.28 | StockAnalysis.com quote and statistics | August 3, 2026 |
| Technical snapshot | 5-day SMA near $26.81, 20-day SMA near $26.58, 50-day SMA near $26.66, 100-day SMA near $25.46, 200-day SMA near $24.57, 14-day RSI near 62, and 14-day historical volatility near 54.6% | Barchart and StockAnalysis.com technical snapshots | August 3, 2026 |
| Redomiciliation | Shareholders approved a redomiciliation from England and Wales to Bermuda in June 2026, and the company now reports as Gates Industrial Corporation Ltd. | Gates press release | June 25, 2026 |
| Insider ownership | About 1.97% owned by insiders | StockAnalysis.com statistics | August 3, 2026 |
This GTES AI stock analysis is an informational research tool, not investment advice, a recommendation, or a promise of future return. Forecast ranges are scenarios based on available filings, quote snapshots, and third-party data as of the stated cutoff date. They may be wrong, incomplete, or outdated after new earnings, guidance changes, market moves, or macro conditions.
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