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Modine Manufacturing has an opportunity to capitalize on the enormous data center buildout, according to KeyBanc Capital Markets. The investment bank initiated coverage of the thermal management stock with an overweight rating and a $125 per share price target, implying about 29% upside from Thursday’s $97.07 close. Modine has lowered its exposure to the legacy automotive segment and is instead focusing on “high growth climate opportunities,” namely data centers, according to analysts led by David Tarantino. KeyBanc said the Racine, Wisconsin-based manufacturer has an “attractive” position within the data center market, specifically in cooling power-hungry building housing racks of computers. Data centers are a key component behind artificial intelligence, as large language models and other AI programs require vast amounts of computing power. Modine’s portfolio includes high-efficiency bespoke cooling systems, Tarantino said. MOD YTD mountain Modine Manufacturing stock in 2025. The company’s efforts to expand its data center business has underpinned Modine’s recently improved earnings, according to Tarantino. The company forecast a compound annual growth rate of roughly 39% from fiscal 2022 through 2026, he said. “Looking out, with the [data center] business on track to represent ~30% of sales in FY26E, we see MOD’s Data Center business maintaining its uniquely robust organic growth momentum (up > +30% in FY26E; ~+48% organic CAGR from FY22-FY26E) as end market growth compounded by ramping cooling needs is further supported by ongoing meaningful capacity additions,” Tarantino wrote. “As such, we view current levels as a compelling entry point given, and believe our $125 PT implying 15.6x more accurately values the data center business and compelling transformation runway,” he added. Shares have pulled back 19% in 2025, but have rallied 23% in the second quarter.
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