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On Jan 15, 2013, Zacks Investment Research upgraded Metso CP Ads (MXCYY) to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Strong backlog growth and encouraging short term look are the rank drivers for this stock. The company received new orders worth €1,511 million during the third quarter. Although, orders declined in the Pulp, Paper and Power segment, it was fully offset by orders received by the services business across all segments.

The orders across service segments increased strongly to €830 million representing 57% of the total orders received. In addition, this automation solution, machinery and equipment manufacturing company has consistently outperformed the Zacks Consensus Estimate in the three out of the last four quarters by an average magnitude of 64.5%.

On October 25, 2012, Metso reported robust third quarter results with earnings of 96 cents a share, which surpassed the Zacks Consensus Estimate by 52.4% or 33 cents a share. Earnings were also up 17.0% year over year.

Consolidated revenues for the third quarter grew 12% year over year to €1.75 billion ($2.2 billion), while organic growth increased 6.5%. Net sales in the Services segment grew 11% and totaled €788 million, accounting for 46% of revenues ($101 million).

On the heels of the strong results, earnings estimates have been trending higher in the past 90 days. The Zacks Consensus Estimate for fiscal 2012 climbed 16.5% to $3.53 per share. This represents a year-over-year increase of 11.7%.

The Zacks Consensus Estimate for fiscal 2013 increased 13.6% to $3.76 per share over the same time frame, reflecting a year-over-year increase of 6.5%.

Other Stocks to Consider

One of the company’s peers, Altra Holdings Inc. (AIMC - Snapshot Report) jumped to a Zacks Rank #1 ( Strong Buy) following its strong third-quarter 2012 results whenearnings beat by 9.7%.

Another peer, Graco Inc. (GGG - Snapshot Report) also achieved a Zacks Rank #1 (Strong Buy) following its strong third quarter 2012 results that reflected a year over year earnings growth of 6.6%.

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