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Analyst Blog

Shares of Barnes Group Inc. (B - Snapshot Report) touched a new 52-week high of $35.71 during the trading session on Sep 20. This represents an increase of 2.5% over the previous high of $34.84 reached the day before on Sep 19.  

Barnes Group closed the trading day on Sep 20 at $35.54, reflecting a solid year-to-date return of 39.2%. The trading volume for the session was 1.1 million shares. Further upside potential exists for this Zacks Rank #3 (Hold) aerospace and industrial manufacturing and service provider as can be ascertained from its expected earnings growth of 3.3% for 2013 and 13.9% for 2014.

Growth Drivers

Barnes Group’s solid financial results for the second quarter 2013 as well as increase in quarterly cash dividend have worked in favor of the company’s shareholders. Since Jul 26, 2013 share prices have risen 8.5%.

Non-GAAP earnings per share in the quarter grew 34.3% year over year and came in at 43 cents, in-line with the Zacks Consensus Estimate. Net sales were up 24.2% on the back of 3.3% increase in Aerospace sales and 40.3% increase in Industrial sales. Operating margin came in at 13.5%, up 150 basis points from 12.0% reported in the year-ago quarter.

Talking of Barnes Group’s outlook for 2013, non-GAAP earnings per share are anticipated to range within $1.85 to $1.95, up 22%-28% from adjusted earnings per share of 2012. Revenue from continuing operations is anticipated to grow 17%-19%.

In addition to the above, Barnes Group raised its quarterly cash dividend by 10% to 11 cents, resulting in annualized cash dividend of 44 cents. Expectations are high regarding Barnes Group’s performance in the quarters ahead. Also, we currently have an Earnings ESP of +1.6% for 2013 and +2.7% for 2014.

Estimate Revisions Show Potency

Over the last 60 days, the Zacks Consensus Estimate for Barnes Group increased by 0.5% to $1.92 for 2013 and by 0.9% to $2.19 for 2014, respectively.

Barnes Group currently has a market capitalization of $1.9 billion. Other stocks to watch out for in the industry are Gorman-Rupp Co. (GRC - Snapshot Report) and Graham Corp. (GHM - Snapshot Report), each holding a Zacks Rank #1 (Strong Buy) while DXP Enterprises, Inc. has a Zacks Rank #2 (Buy).

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