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Bear of the Day: Douglas Dynamics (PLOW)

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Providing snow and ice control equipment for work trucks, another milder-than-expected winter throughout the U.S. could lead to more downside for Douglas Dynamics (PLOW - Free Report) ) stock with the spring approaching.

Landing a Zacks Rank #5 (Strong Sell) and the Bear of the Day here is an overview of why investors may want to be cautious of Douglas Dynamics stock at the moment.

Weaker Q4 Expectations

Douglas Dynamics is expected to post weaker Q4 results later in the month on Monday, February 26. Fourth quarter earnings are forecasted to drop -62% to $0.19 a share compared to $0.52 a share in Q4 2022. On the top line, Q4 sales are projected to dip -16% to $134 million.

This comes after Douglas Dynamics' third quarter earnings of $0.25 a share missed the Zacks Consensus of $0.52 a share by -52% in October. Furthermore, the company missed Q3 sales estimates by -11%. Overall, Douglas Dynamics is expected to round out fiscal 2023 with total sales falling -8% and EPS down -45% to $1.00 a share versus $1.84 per share in 2022.

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Poor Performance & Declining Earnings Estimates

Declining earnings estimates have correlated with Douglas Dynamics' stock plummeting -36% in the last year and now down -46% over the last three years. 

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Image Source: Zacks Investment Research

Unfortunately, the trend of earnings estimate revisions has remained bleak. To that point, FY23 EPS estimates have declined -28% in the last 30 days. Dimming the anticipation of a potential rebound in Douglas Dynamics' bottom line is that FY24 EPS estimates are down -22% over the last month from projections of $2.24 per share to $1.75 a share.

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Bottom Line

There could be more disappointment ahead for Douglas Dynamics stock and investors hoping for a rebound may want to be cautious as declining earnings estimates are very concerning ahead of the company’s Q4 report later in the month.

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