We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Actuant (ATU) Downgraded to Hold on Energy Market Crisis
Read MoreHide Full Article
On Mar 24, Zacks Investment Research downgraded Actuant Corporation to a Zacks Rank #3 (Hold) from a Zacks Rank #2 (Buy). Going by the Zacks model, companies holding a Zacks Rank #3 have chances of performing in line with the broader market.
Why the Downside?
Over the last one month, Actuant’s shares recorded a loss of 1.69%, as against 1.95% gain recorded by the Zacks categorized Machine-Tools & Related Products industry.
The company’s second-quarter fiscal 2017 (ended Feb 28, 2017) adjusted earnings fell short of the Zacks Consensus Estimate by a penny. Earnings were also lower than the year-ago tally by 47.6%. Notably, Actuant narrowed its fiscal 2017 adjusted earnings guidance from $1.10–$1.30 per share to $1.10–$1.20 per share. The company trimmed its guidance primarily as it projects challenging conditions to prevail in the energy market.
Organization of the Petroleum Exporting Countries’ (OPEC) decision to backtrack oil prices escalated feedstock cost and affected the profitability of downstream customers. As a result, the companies started to increase stockpiles, especially in the U.S. This, in turn, has created an oversupply situation in the market.
The prevailing oversupply situation is currently more than offsetting the impact of OPEC’s decision to cut production, thus lowering oil prices again. However, lower oil prices would limit investments in the energy market, making it more sluggish. This would hurt the revenues of manufacturing and industrial companies like Actuant. Actaunt’s top and bottom-line performance might significantly weaken due to further decline in oil prices.
Notably, the stock’s expected loss for the current fiscal is 8.10%, as against the Machine-Tools & Related Products industry’s projected earnings growth rate of 8.20%.
However, this Zacks Rank #3 company is poised to grow on the back of improving industrial end-market business. In the fiscal second quarter, core sales of Actuant’s Industrial and Engineered Solutions segments climbed 11% and 2%, respectively, year over year, after witnessing several dismal quarters. The company believes that the overall global industrial growth would raise commodity prices (especially metals) in the near term. This would improve its top-line performance moving ahead.
Moreover, the company’s restructuring moves, strategic acquisitions, sound marketing initiatives and new innovation programs are anticipated to boost revenues and profitability in the quarters ahead.
Stocks to Consider
Some better-ranked stocks within the industry are listed below:
Applied Industrial Technologies, Inc. (AIT - Free Report) carries a Zacks Rank #2 and has a positive average earnings surprise of 6.18% for the trailing four quarters.
Avery Dennison Corporation (AVY - Free Report) also holds a Zacks Rank #2 and has an average earnings surprise of 6.17% for the past four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.Click here for the 6 trades >>
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Actuant (ATU) Downgraded to Hold on Energy Market Crisis
On Mar 24, Zacks Investment Research downgraded Actuant Corporation to a Zacks Rank #3 (Hold) from a Zacks Rank #2 (Buy). Going by the Zacks model, companies holding a Zacks Rank #3 have chances of performing in line with the broader market.
Why the Downside?
Over the last one month, Actuant’s shares recorded a loss of 1.69%, as against 1.95% gain recorded by the Zacks categorized Machine-Tools & Related Products industry.
The company’s second-quarter fiscal 2017 (ended Feb 28, 2017) adjusted earnings fell short of the Zacks Consensus Estimate by a penny. Earnings were also lower than the year-ago tally by 47.6%. Notably, Actuant narrowed its fiscal 2017 adjusted earnings guidance from $1.10–$1.30 per share to $1.10–$1.20 per share. The company trimmed its guidance primarily as it projects challenging conditions to prevail in the energy market.
Organization of the Petroleum Exporting Countries’ (OPEC) decision to backtrack oil prices escalated feedstock cost and affected the profitability of downstream customers. As a result, the companies started to increase stockpiles, especially in the U.S. This, in turn, has created an oversupply situation in the market.
The prevailing oversupply situation is currently more than offsetting the impact of OPEC’s decision to cut production, thus lowering oil prices again. However, lower oil prices would limit investments in the energy market, making it more sluggish. This would hurt the revenues of manufacturing and industrial companies like Actuant. Actaunt’s top and bottom-line performance might significantly weaken due to further decline in oil prices.
Notably, the stock’s expected loss for the current fiscal is 8.10%, as against the Machine-Tools & Related Products industry’s projected earnings growth rate of 8.20%.
However, this Zacks Rank #3 company is poised to grow on the back of improving industrial end-market business. In the fiscal second quarter, core sales of Actuant’s Industrial and Engineered Solutions segments climbed 11% and 2%, respectively, year over year, after witnessing several dismal quarters. The company believes that the overall global industrial growth would raise commodity prices (especially metals) in the near term. This would improve its top-line performance moving ahead.
Moreover, the company’s restructuring moves, strategic acquisitions, sound marketing initiatives and new innovation programs are anticipated to boost revenues and profitability in the quarters ahead.
Stocks to Consider
Some better-ranked stocks within the industry are listed below:
ACCO Brands Corporation (ACCO - Free Report) has a positive average earnings surprise of 24.74% for the last four quarters and currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies, Inc. (AIT - Free Report) carries a Zacks Rank #2 and has a positive average earnings surprise of 6.18% for the trailing four quarters.
Avery Dennison Corporation (AVY - Free Report) also holds a Zacks Rank #2 and has an average earnings surprise of 6.17% for the past four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere
1 billion iPhones in 10 years but a new breakthrough is expected to generate more
than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging
phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may
kick yourself in 2020.Click here for the 6 trades >>