Modine Manufacturing gains on $4B data center contract and strategic spin-off boosting margins

Modine Manufacturing Company secured a $4 billion contract with a hyperscaler, driving a strong data center cooling supercycle and prompting a strategic shift to high-margin climate solutions. The company is spinning off its low-margin segment to improve overall gross margins significantly. In Q1 FY27, Modine reported 28% sales growth with data center revenue up 90%, although temporary operational inefficiencies compressed margins. The analyst values the stock at $204 per share by FY27 end, with potential upside from successful execution and new deals.