On Aug 24, 2016, Zacks Investment Research upgraded RBC Bearings Inc. to a Zacks Rank #3 (Hold) from a Zacks Rank #4 (Sell). Going by the Zacks model, companies with a Zacks Rank #3 have chances of delivering in-line performances with the broader market over the upcoming quarters.

Why the Upgrade?

RBC Bearings is boosting its revenues, benefiting from improved aerospace business and higher marine sales. The company believes that its revenues and margins in the upcoming quarters would grow with a rise in industrial products sales, driven by booming demand from the global construction and general industries. Also, RBC Bearings is expanding its product portfolio strategically in order to maintain the growth trend in revenues. Moreover, the strategic acquisition of Sargent Aerospace & Defense business is expected to support near-term revenue and margin growth.

However, a few issues continue to pose risks for the company. We believe that rising cost and expenses might prove detrimental to RBC Bearings’ profitability in the quarters ahead, if left unchecked. Extensive threats of industry rivalry also make the company prone to market-share loss risks. Even so, international businesses of the company are exposed to foreign currency translations and other geopolitical risks.

Such bearish aspects have triggered a downward revision in the Zacks Consensus Estimate for the stock over the last 60 days, for both fiscal 2017 and 2018.

Stocks to Consider

Some better-ranked stocks in the industry include DXP Enterprises, Inc. (DXPE Quick QuoteDXPE - Free Report) , Tennant Company (TNC Quick QuoteTNC - Free Report) and Gorman-Rupp Co. (GRC Quick QuoteGRC - Free Report) . All the three companies currently sport a Zacks Rank #1 (Strong Buy).

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