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John Bean (JBT) Up 22% in a Month: What's Driving the Stock?
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Shares of John Bean Technologies Corporation (JBT - Free Report) ) has been gaining over the past month driven by forecast-topping quarterly results and higher demand for packaged food purchases and "eat-at-home" trend amid the pandemic. Despite the impact of the pandemic, the company has been delivering strong EBITDA margin performance, courtesy of its process optimization efforts and cost-cutting actions. The company has recently acquired AutoCoding Systems in a bid to expand its competencies in packaging line equipment and related devices.
The company has a market capitalization of $4.60 billion. The company has a trailing four-quarter earnings surprise of 29.8%, on average.
John Bean’s current-year earnings estimates have been revised upward by 1% to $4.35 per share over the past 30 days. The same for 2021 has moved north 4% to $5.23 per share.
Share Price Performance
The stock has gained 22.3% in the past month, compared with the industry’s growth of 18.8%.
Driving Factors
Q4 Earnings Beat: John Bean reported adjusted earnings of $1.02 per share in fourth-quarter 2020, surpassing the Zacks Consensus Estimate of 89 cents by a margin of 15%. Revenues of $439 million also beat the consensus mark of $428 million.
Upbeat 2021 Guidance: The company has been witnessing sequential improvement in order levels in both its segments over the past two quarters. In fourth-quarter 2020, the company’s orders increased 17% sequentially and 2% compared with the prior-year quarter to $492 million. John Bean projects adjusted earnings per share between $4.30 and $4.55 for 2021. The mid-point of the range suggests growth of 12% from 2020.
Pandemic-Induced Demand to Aid Growth: Due to the pandemic, the food industry has experienced a surge in retail demand driven by packaged food purchases. It has also witnessed positive recovery for certain customers across the food industry, specifically those in the quick service restaurant drive-through businesses and others servicing the sustained "eat-at-home" trend. These trends are expected to sustain in 2021, which bodes well for the FoodTech segment.
Cost Reduction to Drive Margins: John Bean has been delivering strong EBITDA margin performance despite significant decline in revenues amid the pandemic. This can be attributed to the company’s recent process optimization efforts and JBT Operating System discipline, and rapid implementation of cost-cutting actions. In third-quarter 2020, the company implemented a restructuring plan for manufacturing capacity rationalization affecting both FoodTech and AeroTech segments. These restructuring actions are expected generate incremental cost savings of $5 million during 2021.
Also, John Bean’s Elevate plan is likely to drive persistent growth and margin expansion. Per the plan, the company is focusing on accelerating development of innovative products and services to provide customers with solutions, which will enhance yield and productivity
Concerted Efforts to Grow Business: John Bean intends to ramp up initiatives that were previously underway to bring automation solutions to the protein market. In addition, Liquid Foods’ end products such as juice, canned foods and ready meals continue to witness high retail demand. The protein market has a total estimated market size of $18 billion. The Liquid food market has a worth of $8 billion. The company has ample scope to grow in both markets.
The company is also capitalizing on its extensive installed base to expand recurring revenues (which accounts for around 40% of its revenues) from aftermarket parts and services, equipment leases, consumables and airport services. This portion of the business has been seeing a CAGR of 9% over the past three years. It has further room for expansion and will contribute to margins. In AeroTech, the company plans to continue developing advanced military product offerings and customer support capabilities to service global military customers.
Solid Acquisition Strategy: John Bean has a strategic acquisition program focused on companies that add complementary products, which enable it to offer more comprehensive solutions to customers. In the last to years, the company acquired Proseal UK Limited, Prime Equipment Group and certain assets and liabilities of MARS Food Processing Solutions. The latest acquisition of AutoCoding Systems will fortify John Bean’s abilities in the growing global market for in-line coding and inspection solutions that include hardware and software for pharmaceutical, food & beverage, and nutraceutical customers.
Zacks Rank & Stocks to Consider
John Bean currently carries a Zacks Rank #3 (Hold).
Deere & Company has a projected earnings growth rate of 38.8% for fiscal 2021. Over the past year, the company’s shares have appreciated 11% over the past month.
AGCO Corporation has an estimated earnings growth rate of 42.7% for the ongoing year. The company’s shares have gained 4% in the past month.
Avery Dennison has an expected earnings growth rate of 13.7% for 2021. Over the past month, the stock has climbed 5%.
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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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 >>
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John Bean (JBT) Up 22% in a Month: What's Driving the Stock?
Shares of John Bean Technologies Corporation (JBT - Free Report) ) has been gaining over the past month driven by forecast-topping quarterly results and higher demand for packaged food purchases and "eat-at-home" trend amid the pandemic. Despite the impact of the pandemic, the company has been delivering strong EBITDA margin performance, courtesy of its process optimization efforts and cost-cutting actions. The company has recently acquired AutoCoding Systems in a bid to expand its competencies in packaging line equipment and related devices.
The company has a market capitalization of $4.60 billion. The company has a trailing four-quarter earnings surprise of 29.8%, on average.
John Bean’s current-year earnings estimates have been revised upward by 1% to $4.35 per share over the past 30 days. The same for 2021 has moved north 4% to $5.23 per share.
Share Price Performance
The stock has gained 22.3% in the past month, compared with the industry’s growth of 18.8%.
Driving Factors
Q4 Earnings Beat: John Bean reported adjusted earnings of $1.02 per share in fourth-quarter 2020, surpassing the Zacks Consensus Estimate of 89 cents by a margin of 15%. Revenues of $439 million also beat the consensus mark of $428 million.
Upbeat 2021 Guidance: The company has been witnessing sequential improvement in order levels in both its segments over the past two quarters. In fourth-quarter 2020, the company’s orders increased 17% sequentially and 2% compared with the prior-year quarter to $492 million. John Bean projects adjusted earnings per share between $4.30 and $4.55 for 2021. The mid-point of the range suggests growth of 12% from 2020.
Pandemic-Induced Demand to Aid Growth: Due to the pandemic, the food industry has experienced a surge in retail demand driven by packaged food purchases. It has also witnessed positive recovery for certain customers across the food industry, specifically those in the quick service restaurant drive-through businesses and others servicing the sustained "eat-at-home" trend. These trends are expected to sustain in 2021, which bodes well for the FoodTech segment.
Cost Reduction to Drive Margins: John Bean has been delivering strong EBITDA margin performance despite significant decline in revenues amid the pandemic. This can be attributed to the company’s recent process optimization efforts and JBT Operating System discipline, and rapid implementation of cost-cutting actions. In third-quarter 2020, the company implemented a restructuring plan for manufacturing capacity rationalization affecting both FoodTech and AeroTech segments. These restructuring actions are expected generate incremental cost savings of $5 million during 2021.
Also, John Bean’s Elevate plan is likely to drive persistent growth and margin expansion. Per the plan, the company is focusing on accelerating development of innovative products and services to provide customers with solutions, which will enhance yield and productivity
Concerted Efforts to Grow Business: John Bean intends to ramp up initiatives that were previously underway to bring automation solutions to the protein market. In addition, Liquid Foods’ end products such as juice, canned foods and ready meals continue to witness high retail demand. The protein market has a total estimated market size of $18 billion. The Liquid food market has a worth of $8 billion. The company has ample scope to grow in both markets.
The company is also capitalizing on its extensive installed base to expand recurring revenues (which accounts for around 40% of its revenues) from aftermarket parts and services, equipment leases, consumables and airport services. This portion of the business has been seeing a CAGR of 9% over the past three years. It has further room for expansion and will contribute to margins. In AeroTech, the company plans to continue developing advanced military product offerings and customer support capabilities to service global military customers.
Solid Acquisition Strategy: John Bean has a strategic acquisition program focused on companies that add complementary products, which enable it to offer more comprehensive solutions to customers. In the last to years, the company acquired Proseal UK Limited, Prime Equipment Group and certain assets and liabilities of MARS Food Processing Solutions. The latest acquisition of AutoCoding Systems will fortify John Bean’s abilities in the growing global market for in-line coding and inspection solutions that include hardware and software for pharmaceutical, food & beverage, and nutraceutical customers.
Zacks Rank & Stocks to Consider
John Bean currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector are Deere & Company (DE - Free Report) , AGCO Corporation (AGCO - Free Report) and Avery Dennison Corporation (AVY - Free Report) . While Deere flaunts a Zacks Rank #1 (Strong Buy), AGCO Corporation and Avery Dennison carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Deere & Company has a projected earnings growth rate of 38.8% for fiscal 2021. Over the past year, the company’s shares have appreciated 11% over the past month.
AGCO Corporation has an estimated earnings growth rate of 42.7% for the ongoing year. The company’s shares have gained 4% in the past month.
Avery Dennison has an expected earnings growth rate of 13.7% for 2021. Over the past month, the stock has climbed 5%.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 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 >>