Dover's Order Headwinds Don't Alter Our Long-Term View as We Expect a Biopharma Snapback

We view Dover as a collection of moaty businesses in niche markets. Since his installation in 2018, CEO Richard Tobin has focused on improving the portfolio through both organic and inorganic investment, as well as cost-reduction efforts that are still bearing fruit. We expect average incremental EBITDA margins in the mid-30s over the long term and believe the firm can eventually hit nearly 23% reported segment operating margins long term and free cash flow margins of over 16% by 2023.