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Rexnord (RXN) Hits New 52-Week High on Growth Prospects

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Shares of Rexnord Corporation reached a new 52-week high of $23.50 during its trading session on Mar 14. This apex improved upon the last 52-week high of $23.39 on Mar 13.

Post the release of third-quarter fiscal 2017 (ended Dec 2016) results on Feb 2, shares of the company yielded 6.68% return, outperforming the gain of 0.17% seen by the Zacks categorized Machinery Electrical industry.

On Mar 14, Rexnord Corporation closed its trading session at $23.31, yielding year-to-date return of roughly 19%. The trading volume for the session was 1.61 million shares. Positive earnings estimate revisions for fiscal 2018 (ending Mar 2018), along with an expected earnings growth rate of 10% for the next five years indicate the stock’s potential for further price appreciation.

Growth Drivers

Rexnord Corporation’s financial performance has been impressive over the last four quarters, as evident from an average positive earnings surprise of 5.91%. In the recently reported fiscal third-quarter results, the company’s earnings of 25 cents per share surpassed the Zacks Consensus Estimate of 24 cents by 4.17%.

In fiscal 2017, Rexnord Corporation is well positioned to realize $30 million of annual cost-savings from its supply-chain optimization and footprint-repositioning program. Also, the company has the potential to expand its businesses by leveraging the accelerated demand from non-residential construction markets in the U.S. In addition, the growth policies of the newly elected U.S. President are likely to work in favor of industrial stocks.

Estimate Revisions Show Potency

Over the last 30 days, the Zacks Consensus Estimate for Rexnord Corporation increased 0.7% to $1.37 for fiscal 2018 while it remained stable at $1.30 for fiscal 2017. Earnings estimates for fiscal 2018 represents year-over-year growth of 4.93%.

Rexnord Corporation Price and Consensus

 

Rexnord Corporation Price and Consensus | Rexnord Corporation Quote

With a market capitalization of $2.41 billion, Rexnord Corporation currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include Sandvik AB (SDVKY - Free Report) , Actuant Corporation and Kennametal Inc. (KMT - Free Report) . While Sandvik AB sports a Zacks Rank #1 (Strong Buy), both Actuant Corporation and Kennametal carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Sandvik AB’s earnings estimates for 2017 and 2018 have been revised upward over the last 60 days.

Actuant Corporation reported better-than-expected results in the last four quarters, with an average positive earnings surprise of 11.47%. Also, bottom-line expectations for fiscal 2018 have improved over the last 60 days.

Kennametal reported better-than-expected results in the last quarter, with an earnings surprise of 9.09%. Also, its earnings estimates for fiscal 2017 and fiscal 2018 improved in the last 60 days.

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