Joy Global Seen To Outperform

Wisconsin-based Joy Global (JOYG) manufactures surface and underground mining equipment for extraction of coal, copper, iron ore, oil sands, gold and other mineral resources. It also offers a wide range of value-additive aftermarket services aimed at enhancing reliability and optimizing working life of machineries. The stable revenue stream from the high-margin aftermarket operations help Joy Global offset its cyclical original equipment business. 

Joy Global’s Life Cycle Management (LCM) strategy gives the company significant edge over its competitors. The strong and effective aftermarket service platform combined with the LCM program improves equipment reliability, enhances customer satisfaction and develops long-standing relationship. This effectively translates into customer preference for Joy Global’s original equipment and increased sales. 

Of late, Joy Global management has taken several strategies to stay ahead of the curve, e.g., optimizing cost-structure, realigning production capacity to slowing demand, and moving production capacity to low-cost regions. These actions will improve operational efficiency, boost profitability and also solidify long-term viability of the company. Going forward, we see Joy Global shares performing above the broader market and hence recommend it as Outperform.

Read the full analyst report on JOYG