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Manitowoc (MTW) Surged 31% in 3 Months: What's Driving It?
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Shares of The Manitowoc Company, Inc. (MTW - Free Report) have gained around 31% in the last three months. The company has also outperformed its industry’s gain of roughly 26%.
Manitowoc has a market cap of roughly $1.38 billion. Average volume of shares traded in the last three months is around 423.3K. The company has an impressive earnings surprise history as it has topped the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 139.1%.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Driving Factors
Manitowoc’s share price has benefited since its return to profit in the second quarter of 2017, after incurring losses for three straight quarters due to weak crane demand. The momentum continued in the third quarter with the company reporting adjusted earnings of 9 cents per share, a reversal from the prior-year quarter’s loss of 28 cents. Earnings also beat the Zacks Consensus Estimate of a loss of 4 cents per share.
The year-over-year improvement continues to be primarily driven by focus on consolidating manufacturing footprint and reducing cost of organizational structure. In fact, the Americas is showing emerging momentum in demand from energy and commercial construction markets. Europe has been stable and continues to grow in residential as well as commercial construction markets.
The company’s third-quarter orders are pegged at $376 million, up 21% year over year. This improvement was backed by U.S. energy and commercial construction markets that helped offset the persisting weakness in U.S. large infrastructure, Asia Pacific and the Middle East. Backlog at the quarter-end came in at $467.9 million as of Sep 30, 2017, up 32% from $353.6 million as of the end of the third quarter of 2016.
Investors are also appreciative of the company’s progress in the implementation of The Manitowoc Way to drive four key strategic priorities. The first part of the strategy is margin expansion. It continues to align manufacturing capacity and build schedule to the current demand levels. The relocation of crawler crane manufacturing in the United States is complete. This move will optimize manufacturing footprint, reduce costs and stretch margins with an estimated pre-tax cost savings expected of $25-$30 million. The company remains focused on cost controls, reducing headcount, increasing productivity and eliminating waste.
Manitowoc is also focusing on the second priority, growth. Consequently, it has taken efforts to strengthen distribution network. In September, the company hosted more than 200 Potain tower crane dealers from across Europe and Africa. The meeting was one of the largest dealer summits in the company’s history and covered best practices, market updates, along with improvements for products. Additionally, it launched a council forum to increase communication among Manitowoc and its dealers as well as to improve partnerships.
To ensure growth, Manitowoc implemented key account management on a global basis this year, which has already started to reap benefits. The company received an order from a large crane operator in Poland that will be shipped in the fourth quarter. The last time Manitowoc had received an order from this customer was in 2008. In the military crane business, the company has completed the final stage of the U.S. Army's testing requirements, including a rail impact crash and ballistic testing with the expected completion by year-end. The program continues as planned, with increasing shipments of units in 2018.
Innovation is the company’s third key priority. Manitowoc has hiked production and delivery of its newly developed TMS 9000-2 truck-mounted cranes. The product has received strong customer response and is gaining market share. Meanwhile, Manitowoc’s new product pipeline continues to be strong. Approximately 40% of third-quarter revenues stemmed from new products introduced since Manitowoc became a standalone crane company. It is on track to introduce four new mobile products in June 2018. The fourth key strategic priority is velocity. The company applied these tools to augment its boom truck business, which is a highly customized crane with a variety of commercial truck configurations.
Alamo Group has an average positive earnings surprise history of 6%. The stock has gained around 31% in the last three months.
Kennametal has an average positive earnings surprise history of 20.6%. Its shares are up roughly 29% in the last three months.
Sun Hydraulics has an average positive earnings surprise history of 9.6%. Its shares have rallied 34% in the last three months.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Manitowoc (MTW) Surged 31% in 3 Months: What's Driving It?
Shares of The Manitowoc Company, Inc. (MTW - Free Report) have gained around 31% in the last three months. The company has also outperformed its industry’s gain of roughly 26%.
Manitowoc has a market cap of roughly $1.38 billion. Average volume of shares traded in the last three months is around 423.3K. The company has an impressive earnings surprise history as it has topped the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 139.1%.
Let’s take a look into the factors that are driving this Zacks Rank #1 (Strong Buy) stock.
Driving Factors
Manitowoc’s share price has benefited since its return to profit in the second quarter of 2017, after incurring losses for three straight quarters due to weak crane demand. The momentum continued in the third quarter with the company reporting adjusted earnings of 9 cents per share, a reversal from the prior-year quarter’s loss of 28 cents. Earnings also beat the Zacks Consensus Estimate of a loss of 4 cents per share.
The year-over-year improvement continues to be primarily driven by focus on consolidating manufacturing footprint and reducing cost of organizational structure. In fact, the Americas is showing emerging momentum in demand from energy and commercial construction markets. Europe has been stable and continues to grow in residential as well as commercial construction markets.
The company’s third-quarter orders are pegged at $376 million, up 21% year over year. This improvement was backed by U.S. energy and commercial construction markets that helped offset the persisting weakness in U.S. large infrastructure, Asia Pacific and the Middle East. Backlog at the quarter-end came in at $467.9 million as of Sep 30, 2017, up 32% from $353.6 million as of the end of the third quarter of 2016.
Manitowoc Company, Inc. Price and Consensus
Manitowoc Company, Inc. Price and Consensus | Manitowoc Company, Inc. Quote
Investors are also appreciative of the company’s progress in the implementation of The Manitowoc Way to drive four key strategic priorities. The first part of the strategy is margin expansion. It continues to align manufacturing capacity and build schedule to the current demand levels. The relocation of crawler crane manufacturing in the United States is complete. This move will optimize manufacturing footprint, reduce costs and stretch margins with an estimated pre-tax cost savings expected of $25-$30 million. The company remains focused on cost controls, reducing headcount, increasing productivity and eliminating waste.
Manitowoc is also focusing on the second priority, growth. Consequently, it has taken efforts to strengthen distribution network. In September, the company hosted more than 200 Potain tower crane dealers from across Europe and Africa. The meeting was one of the largest dealer summits in the company’s history and covered best practices, market updates, along with improvements for products. Additionally, it launched a council forum to increase communication among Manitowoc and its dealers as well as to improve partnerships.
To ensure growth, Manitowoc implemented key account management on a global basis this year, which has already started to reap benefits. The company received an order from a large crane operator in Poland that will be shipped in the fourth quarter. The last time Manitowoc had received an order from this customer was in 2008. In the military crane business, the company has completed the final stage of the U.S. Army's testing requirements, including a rail impact crash and ballistic testing with the expected completion by year-end. The program continues as planned, with increasing shipments of units in 2018.
Innovation is the company’s third key priority. Manitowoc has hiked production and delivery of its newly developed TMS 9000-2 truck-mounted cranes. The product has received strong customer response and is gaining market share. Meanwhile, Manitowoc’s new product pipeline continues to be strong. Approximately 40% of third-quarter revenues stemmed from new products introduced since Manitowoc became a standalone crane company. It is on track to introduce four new mobile products in June 2018. The fourth key strategic priority is velocity. The company applied these tools to augment its boom truck business, which is a highly customized crane with a variety of commercial truck configurations.
Other Stocks to Consider
Other top-ranked companies in the industrial products space include Alamo Group Inc. (ALG - Free Report) , Kennametal Inc. (KMT - Free Report) and Sun Hydraulics Corporation , all sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Alamo Group has an average positive earnings surprise history of 6%. The stock has gained around 31% in the last three months.
Kennametal has an average positive earnings surprise history of 20.6%. Its shares are up roughly 29% in the last three months.
Sun Hydraulics has an average positive earnings surprise history of 9.6%. Its shares have rallied 34% in the last three months.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>