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Colfax (CFX) Upgraded to Strong Buy on Solid Prospects

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On Jun 14, Zacks Investment Research upgraded Colfax Corporation to a Zacks Rank #1 (Strong Buy). Going by the Zacks model, companies sporting a Zacks Rank #1 have strong chances of outperforming the broader market.

In the last one month, Colfax’s shares have yielded a return of 2.86%, outperforming the gain of 1.70% recorded by the Zacks categorized Machinery General Industrial industry.

Why the Upgrade?

Market sentiments have been favoring Colfax for quite some time now, especially after the company reported better-than-expected results in the last four quarters with an average positive earnings surprise of 9.45%. In the last reported quarter, earnings of 35 cents per share exceeded the Zacks Consensus Estimate of 30 cents by 16.67%.

For 2017, Colfax increased its adjusted earnings guidance to $1.60−$1.75 per share from the previous projection of $1.55−$1.70. The company anticipates benefiting from its improving end-market conditions and cost savings from its restructuring efforts. Also, inorganic growth efforts will create synergistic values in the quarters ahead. In March, the company agreed to acquire Siemens AG’s Siemens Turbomachinery Equipment GmbH business. The strategic buyout would widen the company’s Howden’s compression solutions’ range.   

Investors seem to be optimistic about Colfax’s future prospects, as evident from positive revisions in earnings estimates for the stock. Over the last 60 days, the Zacks Consensus Estimate for the company increased 3% to $1.70 for 2017 and 5.3% to $1.99 for 2018.

Colfax Corporation Price and Consensus

 

Colfax Corporation Price and Consensus | Colfax Corporation Quote

Other Stocks to Consider

Colfax has a market capitalization of $5 billion. Other stocks worth considering in the industry include Kennametal Inc. (KMT - Free Report) , Parker-Hannifin Corporation (PH - Free Report) and Regal Beloit Corporation (RBC - Free Report) . While Kennametal and Parker-Hannifin sport a Zacks Rank #1, Regal Beloit carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kennametal’s earnings estimates for fiscal 2017 and fiscal 2018 were revised upward in the last 60 days. Also, the company’s average earnings surprise for the last four quarters was a positive 6.24%.

Parker-Hannifin’s average earnings surprise for the last four quarters was a positive 14.94%. Also, earnings expectations for fiscal 2017 and fiscal 2018 improved over the past 60 days.

Regal Beloit’s earnings estimates for 2017 and 2018 were revised upward in the last 60 days. Also, the company’s average earnings surprise for the last four quarters was a positive 1.48%.

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