Flir Systems Stock is Up 25% in 2021, Will the Rally Continue?  

NASDAQ: FLIR | FLIR Systems, Inc. News, Ratings, and Charts

FLIR – FLIR Systems (FLIR) is one of the best-performing stocks in the year. Will it continue higher or is it time to sell? Patrick Ryan analyzes the stock and gives his take.

Flir Systems (FLIR) designs, makes, and markets infrared camera systems and thermal imaging systems. FLIR products are used by commercial, industrial, and even governmental clients.

Launched in 1978, FLIR went public around $1 per share in June of ’93. FLIR remained a penny stock until the early aughts. FLIR moved all the way up to the low $60s in 2018. Today, FLIR is trading at $54.76 per share.

FLIR has soared an impressive 25% throughout the first month and a half of 2021. Though the market as a whole is trending upward, FLIR’s ascent is particularly noteworthy as most stocks do not gain one-quarter of their value in a mere 40 days. Let’s take a look at whether FLIR’s rally is temporary or if it will continue.

Why FLIR is Generating Investor Interest

FLIR is drawing investor interest largely because it qualifies as a coronavirus stock. FLIR’s imaging systems are used by GM and other organizations to identify individuals who have a high skin temperature. When FLIR imaging systems pick up on the elevated temperature, the individual in question is flagged as a potential carrier of COVID-19.

This past January, it was revealed that FLIR would be acquired by Teledyne Technologies (TDY) for $8 billion. FLIR shares spiked as a result of the news as the deal valued the company at $56 per share, a nearly 30% hike over the company’s closing price at the end of ’20. The acquisition was likely spurred by the increase in sales of FLIR’s imaging cameras that detect increases in skin temperature.

FLIR’s industrial technologies sales growth increased throughout the financial quarters of 2020 by 1.9%, 5.5%, and 9%. Though the number of positive coronavirus tests and deaths are gradually declining, the demand for FLIR’s technology will likely hold strong until the pandemic ends, possibly at some point in late ’21. However, there is always the potential for the virus to morph into a variant that cannot be defeated by vaccines, ultimately sending FLIR’s stock even higher.

FLIR According to the Analysts

The analysts have established a high price target of $54 for FLIR. The average analyst price target for the stock is $45. All in all, nine analysts have analyzed the stock. Though FLIR is currently trading around the high price target, a prolonged pandemic could easily send its shares even higher. Keep in mind that FLIR has a fairly reasonable forward P/E ratio of 23.60, meaning the stock still might have some room for upward movement. After all, plenty of tech stocks have forward P/E ratios in the hundreds or even higher.

FLIR’s POWR Ratings

FLIR has B grades in the Quality and Growth components of the POWR Ratings. If you are curious as to how FLIR grades out in the Value, Momentum, and Sentiment components, click here. All in all, FLIR has an overall POWR Rating of B meaning it qualifies as a Buy.

Of the 69 publicly traded companies in the Air/Defense Services space, FLIR is ranked 11th. You can learn more about the Air/Defense Services industry by clicking here.

Will FLIR Move Even Higher?

FLIR has the potential to return to its 52-week high of $52 and change. However, there is also the potential for investors to take some profit off the table following the stock’s rapid ascension to start the new year. Perhaps what matters most is the course of the pandemic. If vaccines prove ineffective against coronavirus variants, the demand for FLIR’s products will increase all the more in the months and possibly even years to come.

FLIR might be a solid play simply because of the fear of the unknown. Though no one wants to acknowledge the potential for the virus to continue morphing and overcoming all of our vaccines, this potential scenario that might play out in the future. If you believe the virus will linger, FLIR is certainly worthy of your investing dollars. FLIR might continue to attract investment dollars until the scientific community is certain the available vaccines can offset variants of the virus.

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FLIR shares were trading at $54.64 per share on Wednesday morning, down $0.12 (-0.22%). Year-to-date, FLIR has gained 24.66%, versus a 4.21% rise in the benchmark S&P 500 index during the same period.


About the Author: Patrick Ryan


Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...


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