"TDY is one of the highest quality, most consistent, best managed companies we cover that compounds cash flow over time," analyst Noah Poponak said.
Cash flow compounders reinvest their excess free cash flow each year back into the company at a rate that is sustainable and provide long-term growth.
Teledyne has compounded free cash flow at a 17% compound annual growth rate over the last decade, according to the Goldman note.
According to Poponak, Teledyne's margins have expanded over time by shifting into higher value-added business lines, which he expects will support continued EPS and free cash flow compounding long term.
Another catalyst that will drive higher earnings and cash flow is Teledyne's M & A efforts, the analyst said.
Persons:
Goldman Sachs, Noah Poponak, Goldman, Poponak, — CNBC's Michael Bloom
Organizations:
Teledyne Technologies, Teledyne, FLIR Systems