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Applied Industrial (AIT) Rises 17% in 3 Months: Here's Why

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Shares of Applied Industrial Technologies, Inc. (AIT - Free Report) have gained an impressive 17.3% in the past three months. Solid demand, benefits from acquired assets, improved financial performance and healthy projections have added to AIT’s attractiveness. It presently carries a Zacks Rank #2 (Buy).

Applied Industrial engages in distributing industrial products, including specialty flow control solutions, engineered fluid power components, power transmission products, bearings, and miscellaneous industrial supplies. The company is based in Cleveland, OH, and has a market capitalization of $4.1 billion.

The company belongs to the Zacks Manufacturing - General Industrial industry, which comes under the ambit of the Zacks Industrial Products sector. In the past three months, the industry has declined 0.4%. In contrast, the S&P 500 has gained 5.5% during the same period and the sector has increased 2.2%.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

 

Factors Influencing the Stock

In the past three months, Applied Industrial delivered impressive results for the first quarter of fiscal 2022 (ended September 2021). Its earnings surpassed the Zacks Consensus Estimate by 14.29% and increased 52.8% from the year-ago quarter. Healthy sales growth and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) margin improvements supported bottom-line growth.

In addition to the solid financial performance, Applied Industrial’s strengthening business in industrial end markets, solid product offerings, and healthy pricing actions are tailwinds for the quarters ahead. Investments in customer development, digital offerings, expanding automation, and IIoT are beneficial.

For fiscal 2022 (ending June 2022), Applied Industrial expects total year-over-year revenue growth of 8-10%, suggesting an improvement from a 0.3% decline recorded in fiscal 2021 (ended June 2021). Organic sales are predicted to increase 7-9% in fiscal 2022. Supply-chain issues and inflationary issues might offset the momentum partially. Earnings per share are expected to be $5.00-$5.40 for fiscal 2022, suggesting growth of 5-14% from the previous year’s reported number.

Applied Industrial’s commitment toward returning values to shareholders raises its appeal. Regarding buyout actions, Applied Industrial acquired R.R. Floody in August 2021. The buyout has been boosting exposure in the U.S. Midwest region and offerings in automation technology.

The Zacks Consensus Estimate for Applied Industrial’s earnings per share is pegged at $5.41 for fiscal 2022 (ending June 2022) and $5.94 for fiscal 2023 (ending June 2023), marking increases of 1.9% and 2.2% from the respective 30-day-ago figures. Such upward revisions in earnings estimates reflect healthy operating conditions for the company.

Applied Industrial Technologies, Inc. Price and Consensus

 

Applied Industrial Technologies, Inc. Price and Consensus

Applied Industrial Technologies, Inc. price-consensus-chart | Applied Industrial Technologies, Inc. Quote

Three-Month Price Performance of Industry Players

Three other stocks from the industry that performed well in the past three months are discussed below.

Shares of Helios Technologies, Inc. (HLIO - Free Report) have gained 31.8% in the past three months. HLIO’s performance in the last reported quarter was impressive, with an earnings beat of 30.49%.

In the past 30 days, the Zacks Consensus Estimate for Helios Technologies’ earnings has increased 7.9% for 2021 and 9.8% for 2022. The company presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Welbilt, Inc.’s (WBT - Free Report) shares have gained 2.5% in the past three months. WBT’s results delivered in the last quarter were better than expected, with earnings surpassing estimates by 40.00%.

In the past 30 days, the Zacks Consensus Estimate for Welbilt’s earnings has increased 3.2% for 2021 and 5.9% for 2022. The WBT stock presently carries a Zacks Rank #2.

Standex International, Inc. (SXI - Free Report) performed well in the past three months. Its shares have gained 19.5% in the past three months. SXI’s earnings beat in the last reported quarter was 3.88%.

In the past 60 days, the Zacks Consensus Estimate for Standex’s earnings has increased 1.8% for fiscal 2022 (ending June 2022) and 0.8% for fiscal 2023 (ending June 2023). The company presently carries a Zacks Rank #3 (Hold).