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On Apr 1, Zacks Investment Research upgraded Manitowoc Company, Inc. (MTW - Analyst Report), a leading manufacturer of commercial foodservice equipment and cranes, to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Shares and estimates of Manitowoc started escalating following its strong fourth-quarter results on Jan 30. Adjusted earnings per share were 47 cents, a 74% year-over-year increase, helped by sound performance of the Foodservice segment, successful introduction of new products as well as the company’s cost control initiatives. The bottom line beat the Zacks Consensus Estimate of 33 cents, delivering a 42% positive earnings surprise.

Reports that its new product launches have been received well at the ConExpo 2014, which ended on Mar 8, also helped boost shares. ConExpo, an international exhibition held every three years, offers a major platform for companies like Manitowoc to introduce their products. Manitowoc launched 10 new products this year, including cranes and booms. The success of these products will be a catalyst for the company.

For 2014, Manitowoc expects modest top-line growth in the Crane segment. Foodservice revenues are expected to rise in mid-single digits. The company forecasts high single-digit improvement in operating margins in the Crane segment and high-teens gain in the Foodservice segment.

Moreover, demand in the wind sector and oil and gas market are expected to grow. The incorporation of advanced technology, innovation in brands and manufacturing initiatives will also aid in growth. Manitowoc will also benefit from execution of its new credit agreement, cost reduction and process improvement initiatives as well as debt repayment.

Other Stocks to Consider

Other players in the machinery industry, which look attractive at current levels, include Komatsu Ltd. (KMTUY), Zebra Technologies Corp. (ZBRA - Snapshot Report) and Caterpillar, Inc. (CAT - Analyst Report). While Komatsu holds a Zacks Rank #1, Zebra Technologies and Caterpillar hold a Zacks Rank #2 (Buy).

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