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Lindsay (LNN) Hits 52-Week High: What's Driving the Upside?

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Shares of Lindsay Corporation (LNN - Free Report) scaled a fresh 52-week high of $125.39 during trading session on Dec 15, before retracting a bit to close at $124.77. The company’s forecast-topping fourth-quarter fiscal 2020 results, Foundation for Growth initiative, focus on expanding infrastructure business as well as higher farm income forecasts in the United States have contributed to this rally.

Lindsay’s shares have gained 25.1% over the past three months, outperforming the industry’s growth of 15.2%.



Q4 Earnings & Sales Top Estimates

The company reported adjusted earnings per share of $1.35 per share in the fiscal fourth quarter 2020, surpassing the Zacks Consensus Estimate of $1.05. Revenues of $128 million also beat the consensus mark of $117 million. Both the bottom- and top-line figures increased year over year.

Driving Factors

Lindsay launched its Foundation for Growth initiative in 2018 to boost the company’s performance. The company continues to realize performance improvements, revenue gains, cost savings and other benefits from this initiative. It is anticipated to improve the company’s overall net earnings in the days ahead.

The company’s infrastructure business is poised to grow on the Highways England project. Also, momentum in Road Zipper Systems will contribute to the segment’s performance. Lindsay’s Road Zipper System is a highly differentiated product that positively addresses key infrastructure needs such as reducing congestion, lowering carbon emission, and increasing driver safety. Thereby, it has been gaining popularity globally. Further, demand for the company’s transportation safety products continues to gain traction on population growth and the need for improved road safety.    

The U.S farm sector is showing signs of stabilization on the pick-up in commodity prices and higher U.S farm income forecasts. Per the U.S. Department of Agriculture's (USDA) latest available projections, net farm income is anticipated to jump 43.1% to $119.6 billion in the current year. In inflation-adjusted terms, the projected net farm income in 2020, if realized, would mark the highest level since 2013 and 32% higher than the 2000-19 average ($90.6 billion). These factors will encourage farmers to resume spending on agricultural equipment, which will drive the company’s top-line performance. Moreover, continued focus on bringing innovative technology products will boost Lindsay’s irrigation margin performance in the United States.

Positive Estimate Revisions

The Zacks Consensus Estimate for fiscal 2021 earnings moved up 11.6% over the past 60 days and is currently pegged at $3.16.

Zacks Rank & Other Stocks to Consider

Lindsay currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other top-ranked stocks in the Industrial Products sector include iRobot Corporation (IRBT - Free Report) , Deere & Company (DE - Free Report) and Silgan Holdings Inc. (SLGN - Free Report) . While iRobot and Deere flaunt a Zacks Rank #1, Silgan carries a Zacks Rank of 2, at present.

iRobot has an estimated earnings growth rate of 18.8% for the ongoing year. Shares of the company have gained 1.7% in the six months.

Deere has an expected earnings growth rate of 46% for fiscal 2021. The stock has appreciated 59.6% in six months’ time.

Silgan has a projected earnings growth rate of 37.9% for the current year. Over the past six months, the company’s shares have rallied 12%.

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