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Here's Why Oshkosh (OSK) Should be in Your Portfolio Now
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Of late, Oshkosh Corporation (OSK - Free Report) has been performing well. In the reported fourth-quarter fiscal 2018 results, both its adjusted earnings and net sales increased year over year. Further, the company’s stocks have moved up 2.4% over the past month against the industry’s 5.4% decline. Strong fundamentals and solid long-term growth opportunities make the stock a solid bet now.
Positive FY19 & Long-Term Outlook
Oshkosh is backed by strong backlogs across major sectors, opportunities of sustained solid market conditions and customer demand. For fiscal 2019, the company expects consolidated sales of $7.85-$8.15 billion compared with $7.7 billion recorded in the last fiscal year.
Further, adjusted earnings per share in the current fiscal year are projected to be $6.50-$7.25 per share, marking an increase from $6.36 recorded in the prior fiscal year.
Oshkosh also provided a detailed projection for its four segments in fiscal 2019. With continued growth of replacement demand over the next few years, its Access equipment segment is expected to witness net sales of $3 billion-$3.9 billion. Likewise, strong continued RCV market in 2019, along with concrete mixer market, is expected to drive Commercial segment’s sales to roughly $1.05 billion in 2019. Further, sales for Defence and Fire & Emergency segments of $2 billion and $1.2 billion, respectively, will be driven by robust domestic sales.
Moreover, the company’s cost reduction efforts and expected lower incentive compensation will lead to reduced corporate expenses in fiscal 2019. In fact, Oshkosh projects expenses to be between $145 million and $150 million, lower than the figure recorded in fiscal 2018.
A strong cash flow aids Oshkosh to reward shareholders through dividends and share repurchase programs. For fiscal 2019, the company aims to repurchase shares worth $350 million and pay dividends in each quarter. Further, it plans to fund all these shareholder rewards through its free cash flow. In fact, the company set a target to return almost 100% of its free cash flow to shareholders in fiscal 2019.
Earnings History & Estimates
Oshkosh outpaced the Zacks Consensus Estimate in all the trailing four quarters, with a positive average earnings surprise of 31.8%. For on-going first-quarter fiscal 2019, the Zacks Consensus Estimate for the stock has moved 18.4% upward over the past thirty days.
A few other top-ranked stocks in the auto space include General Motors Company (GM - Free Report) and O’Reilly Automotive, Inc. (ORLY - Free Report) , with a Zacks Rank #2, and Tesla, Inc. (TSLA - Free Report) with a Zacks Rank #1.
General Motors has an expected long-term growth rate of 8.5%. Shares of the company have increased 11.1% over the past month.
O’Reilly has an expected long-term growth rate of 15.7%. Over the past three months, shares of the company have gained 8.1%.
Tesla has an expected long-term growth rate of 10%. Shares of the company have rallied 27.6% over the past month.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Here's Why Oshkosh (OSK) Should be in Your Portfolio Now
Of late, Oshkosh Corporation (OSK - Free Report) has been performing well. In the reported fourth-quarter fiscal 2018 results, both its adjusted earnings and net sales increased year over year. Further, the company’s stocks have moved up 2.4% over the past month against the industry’s 5.4% decline. Strong fundamentals and solid long-term growth opportunities make the stock a solid bet now.
Positive FY19 & Long-Term Outlook
Oshkosh is backed by strong backlogs across major sectors, opportunities of sustained solid market conditions and customer demand. For fiscal 2019, the company expects consolidated sales of $7.85-$8.15 billion compared with $7.7 billion recorded in the last fiscal year.
Further, adjusted earnings per share in the current fiscal year are projected to be $6.50-$7.25 per share, marking an increase from $6.36 recorded in the prior fiscal year.
Oshkosh also provided a detailed projection for its four segments in fiscal 2019. With continued growth of replacement demand over the next few years, its Access equipment segment is expected to witness net sales of $3 billion-$3.9 billion. Likewise, strong continued RCV market in 2019, along with concrete mixer market, is expected to drive Commercial segment’s sales to roughly $1.05 billion in 2019. Further, sales for Defence and Fire & Emergency segments of $2 billion and $1.2 billion, respectively, will be driven by robust domestic sales.
Moreover, the company’s cost reduction efforts and expected lower incentive compensation will lead to reduced corporate expenses in fiscal 2019. In fact, Oshkosh projects expenses to be between $145 million and $150 million, lower than the figure recorded in fiscal 2018.
Oshkosh Corporation Price and Consensus
Oshkosh Corporation Price and Consensus | Oshkosh Corporation Quote
Shareholders’ Rewards
A strong cash flow aids Oshkosh to reward shareholders through dividends and share repurchase programs. For fiscal 2019, the company aims to repurchase shares worth $350 million and pay dividends in each quarter. Further, it plans to fund all these shareholder rewards through its free cash flow. In fact, the company set a target to return almost 100% of its free cash flow to shareholders in fiscal 2019.
Earnings History & Estimates
Oshkosh outpaced the Zacks Consensus Estimate in all the trailing four quarters, with a positive average earnings surprise of 31.8%. For on-going first-quarter fiscal 2019, the Zacks Consensus Estimate for the stock has moved 18.4% upward over the past thirty days.
Beside strong history of earnings and upward estimates for earnings, Oshkosh’s stock has a VGM Score of B and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks (Strong Buy) here.
Other Key Picks
A few other top-ranked stocks in the auto space include General Motors Company (GM - Free Report) and O’Reilly Automotive, Inc. (ORLY - Free Report) , with a Zacks Rank #2, and Tesla, Inc. (TSLA - Free Report) with a Zacks Rank #1.
General Motors has an expected long-term growth rate of 8.5%. Shares of the company have increased 11.1% over the past month.
O’Reilly has an expected long-term growth rate of 15.7%. Over the past three months, shares of the company have gained 8.1%.
Tesla has an expected long-term growth rate of 10%. Shares of the company have rallied 27.6% over the past month.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>