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Reasons Why You Should Avoid Betting on Barnes (B) Stock Now
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Barnes Group, Inc. (B - Free Report) is grappling with persistent supply-chain constraints, increasing operating costs and foreign currency woes.
The Zacks Rank #4 (Sell) player has a market capitalization of $2.2 billion.
Let’s discuss the factors that might continue to take a toll on the firm.
Weak Segmental Performance: Barnes’ Industrial segment is experiencing weakness due to the disruption in global automotive production caused by continued global supply-chain constraints and inflationary pressures. Also, the COVID-related operational disruption in the aerospace market is affecting the company’s Aerospace segment’s performance.
Steep Costs and Expenses: The company’s cost of sales in the first nine months of 2022 increased 4.3% on a year-over-year basis. Its operating margin decreased 100 basis points year over year in the third quarter of 2022 due to inflationary headwinds and rising interest rates. Escalating costs and expenses are expected to persist in the quarters ahead, affecting B’s margins and profitability.
High Tax Rate: For 2022, Barnes predicts a 24.5% tax rate, suggesting a rise from 21.9% recorded in 2021. High effective tax rates are concerning for the company, as they might dent the bottom line.
Forex Woes: Given its widespread presence in the international markets, B is exposed to unfavorable foreign currency movement. For instance, in third-quarter 2022, foreign exchange headwinds had an adverse impact of 8%, year over year, on its Industrial segment’s sales. A stronger U.S. dollar might depress B's overseas business's results in the quarters ahead.
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Reasons Why You Should Avoid Betting on Barnes (B) Stock Now
Barnes Group, Inc. (B - Free Report) is grappling with persistent supply-chain constraints, increasing operating costs and foreign currency woes.
The Zacks Rank #4 (Sell) player has a market capitalization of $2.2 billion.
Let’s discuss the factors that might continue to take a toll on the firm.
Weak Segmental Performance: Barnes’ Industrial segment is experiencing weakness due to the disruption in global automotive production caused by continued global supply-chain constraints and inflationary pressures. Also, the COVID-related operational disruption in the aerospace market is affecting the company’s Aerospace segment’s performance.
Steep Costs and Expenses: The company’s cost of sales in the first nine months of 2022 increased 4.3% on a year-over-year basis. Its operating margin decreased 100 basis points year over year in the third quarter of 2022 due to inflationary headwinds and rising interest rates. Escalating costs and expenses are expected to persist in the quarters ahead, affecting B’s margins and profitability.
High Tax Rate: For 2022, Barnes predicts a 24.5% tax rate, suggesting a rise from 21.9% recorded in 2021. High effective tax rates are concerning for the company, as they might dent the bottom line.
Forex Woes: Given its widespread presence in the international markets, B is exposed to unfavorable foreign currency movement. For instance, in third-quarter 2022, foreign exchange headwinds had an adverse impact of 8%, year over year, on its Industrial segment’s sales. A stronger U.S. dollar might depress B's overseas business's results in the quarters ahead.
Barnes Group, Inc. Price and Consensus
Barnes Group, Inc. price-consensus-chart | Barnes Group, Inc. Quote
Southbound Estimate Trend: In the past 90 days, the Zacks Consensus Estimate for 2022 earnings has been revised 1% downward.
Stocks to Consider
Some better-ranked companies from the Industrial Products sector are discussed below:
Xylem Inc. (XYL - Free Report) presently sports a Zacks Rank #1 (Strong Buy). XYL’s earnings surprise in the last four quarters was 13.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks.
In the past 60 days, Xylem’s earnings estimates have increased 0.1% for 2022. The stock has gained 47.1% in the past six months.
MRC Global Inc. (MRC - Free Report) presently has a Zacks Rank #2 (Buy). MRC’s earnings surprise in the last four quarters was 103%, on average.
In the past 60 days, MRC Global’s earnings estimates have increased 0.1% for 2022. The stock has gained 18.6% in the past six months.
EnerSys (ENS - Free Report) delivered an average four-quarter earnings surprise of 2.1%. ENS presently carries a Zacks Rank of 2.
ENS’ earnings estimates have increased 0.6% for fiscal 2023 in the past 60 days. The stock has gained 33.7% in the past six months.