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Value-added manufacturing provider, Mayville Engineering Company, has entered into an agreement with a fitness company to supply key components for fitness equipment. Mayville did not disclose the identity of its new customer.

Mayville Engineering (MEC) Chairman, President, and CEO, Robert D. Kamphuis said, “We are proud to be working with one of the most innovative pioneers in the world of fitness.”

Kamphuis further said, “It is gratifying that MEC’s unique technical capabilities and unmatched dependability are being recognized with this agreement.” (See Mayville Engineering stock analysis on TipRanks)

This is a long-term agreement for supplying components of fitness equipment and Mayville projects the customer to be among its top 10 customers by revenue in 2022.

Furthermore, in 2021, Mayville plans capital expenditure of between $35 million and $45 million on automation and technology and a further increase in production in early 2022.

Last month, Robert W. Baird analyst Mircea Dobre reiterated a Buy rating on the stock with a $20 price target (41.8% upside potential).

Commenting on the company’s 4Q performance, Dobre said, “We raised our estimates ahead of MEC’s print noting broad end-market improvement evident in reports from customers across commercial vehicle, construction, powersport, agriculture, and military end markets.”

Dobre added, “While MEC has not provided guidance, we continue to expect meaningful 2021 ramp in customer production schedules which, when coupled with help from cost reductions and rightsizing actions, should result in solid margin and earnings expansion.”

The stock has a Moderate Buy consensus rating based on Dobre’s recommendation. Shares have gained about 166.5% over the past year.

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