On January 4, Zacks Investment Research downgraded Raven Industries Inc. (RAVN) to a Zacks #5 Rank (Strong Sell).
Why the Downgrade?
Raven Industries has witnessed sharp downward estimate revisions and hit its 52-week low after reporting disappointing results for third-quarter 2012 on November 20. Shares of this industrial manufacturer of products for the agricultural, industrial, construction and military/aerospace markets have dipped to the $20 range since August (post-second quarter results) from the prior $30 range.
Raven’s third-quarter earnings per share of 30 cents missed the Zacks Consensus Estimate of 34 cents. On a year-over-year basis, earnings dipped 3%.
Raven’s Aerostar will continue to be impacted by a lack of aerostat orders and the Engineered Films segment will also likely face a challenging environment and tough year-over-year comparison. Furthermore, given the company's performance so far in 2012 and expectations of a difficult fourth-quarter, the long-term earnings growth target of 10-15% seems unlikely in the current year.
The Zacks Consensus Estimate for 2012 decreased 4% to $1.45 per share over the last 60 days. For 2013, the estimate was revised downward over the last 60 days, sinking the Zacks Consensus Estimate by 5% to $1.60 per share.
Other Stocks to Consider
Among the other stocks in the same industry, Carlisle Companies Incorporated
(CSL - Snapshot Report
) holds a Zacks #2 Rank (Buy) and is a favorable option for investors.