SPX Technologies (SPXC) is expected to outperform due to strong positioning in heating, ventilation, and air conditioning, a recovering detection and measurement segment, and strategic mergers and acquisitions, Oppenheimer said.

"We believe SPX is a proven compounder story," the firm said in a Monday note. "Given its improved core sales trajectory and margin/return profile, we expect normalized low double-digit organic/core earnings per share growth."

The company's exposure to data centers through its cooling tower and engineered air movement technologies offers real value, and revenue from data center-related products is expected to double in 2024.

The HVAC growth is driven by institutional demand across verticals such as healthcare, pharmaceuticals, and education, making it more sustainable and visible.

Detection and measurement demand is expected to reaccelerate, supported by infrastructure investments in energy, utilities, transportation, and water, as well as higher defense spending, according to the note.

Oppenheimer also pointed to strategic capital deployment, highlighting two high-fit deals closed this year and continued M&A as potential upside drivers.

SPX completed the acquisitions of Sigma Heating and Cooling and Omega Heat Pump for about $144 million, and also closed its acquisition of Kranze Technology Solutions earlier this year.

The firm has an outperform rating on the company's stock and raised its price target to $197 from $170.

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