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Lincoln Electric (LECO) Buys Kestra, Expand Specialty Alloys
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Lincoln Electric Holdings, Inc. (LECO - Free Report) acquired a Brazilian private manufacturing company, Kestra. The buyout will expand the company’s specialty alloys portfolio and services as well as strengthen its 2025 Higher Standard strategy in South America.
Sao Paulo-based Kestra is a manufacturer and provider of specialty welding consumables, wear plates as well as maintenance and repair services for alloy and wear-resistant products, generally used in agricultural, mining, steel and industrial mill applications.
Lincoln Electric is continuously evaluating buyout options, focused primarily on tuck-in assets, supporting its Higher Standard 2025 strategy. Lincoln Electric’s recent acquisition of Fabricated Tube Products and Shoals positions its Harris Products Group to capitalize on growth prospects in the HVAC (Heating, ventilation and air conditioning) market. Last year, the company acquired Zeman Bauelemente Produktionsgesellschaftm.b.H., a Zeman Group unit, to drive automation growth in structural steel applications. The buyout will boost the company’s annual automation sales by around 10% and expand its international automation capabilities. Last year, the company invested $62 million in capital spending and spent $156 million on acquisitions.
Lincoln Electric revised its 2025 financial targets. The company is well-poised for growth on the back of a strong product development pipeline, industry-leading position in automation, investments in new technologies like additive and a solid balance sheet that will support acquisitions. The sales growth rate from 2020 to 2025 is now projected in the high-single-digit to low-double-digit percentage range. Backed by efforts to improve the mix of its business, advancing operational excellence through continuous improvement projects and volume growth, the company is targeting an average operating income margin of 16% between 2020 and 2025. This improved performance is expected to yield a high teen to low 20% earnings per share (EPS) growth rate from 2020 to 2025.
Last month, Lincoln Electric reported fourth-quarter 2021 adjusted earnings of $1.61 per share. The bottom line rose 29.8% year over year. The company beat the Zacks Consensus Estimate of $1.55. Revenues of $844 million increased 21.7% year on year and surpassed the Consensus Estimate of $816 million.
Price Performance
Lincoln Electric’s shares have gained 6.2% in the past year against the industry’s decline of 18.6%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Lincoln Electric currently carries a Zacks Rank #3 (Hold).
Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.
Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 20.2% in a year.
Dover’s fourth-quarter 2021 adjusted EPS increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.
Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 5%. DOV’s shares have rallied around 32.1% in a year.
Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.
Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 11.7%.
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Lincoln Electric (LECO) Buys Kestra, Expand Specialty Alloys
Lincoln Electric Holdings, Inc. (LECO - Free Report) acquired a Brazilian private manufacturing company, Kestra. The buyout will expand the company’s specialty alloys portfolio and services as well as strengthen its 2025 Higher Standard strategy in South America.
Sao Paulo-based Kestra is a manufacturer and provider of specialty welding consumables, wear plates as well as maintenance and repair services for alloy and wear-resistant products, generally used in agricultural, mining, steel and industrial mill applications.
Lincoln Electric is continuously evaluating buyout options, focused primarily on tuck-in assets, supporting its Higher Standard 2025 strategy. Lincoln Electric’s recent acquisition of Fabricated Tube Products and Shoals positions its Harris Products Group to capitalize on growth prospects in the HVAC (Heating, ventilation and air conditioning) market. Last year, the company acquired Zeman Bauelemente Produktionsgesellschaftm.b.H., a Zeman Group unit, to drive automation growth in structural steel applications. The buyout will boost the company’s annual automation sales by around 10% and expand its international automation capabilities. Last year, the company invested $62 million in capital spending and spent $156 million on acquisitions.
Lincoln Electric revised its 2025 financial targets. The company is well-poised for growth on the back of a strong product development pipeline, industry-leading position in automation, investments in new technologies like additive and a solid balance sheet that will support acquisitions. The sales growth rate from 2020 to 2025 is now projected in the high-single-digit to low-double-digit percentage range. Backed by efforts to improve the mix of its business, advancing operational excellence through continuous improvement projects and volume growth, the company is targeting an average operating income margin of 16% between 2020 and 2025. This improved performance is expected to yield a high teen to low 20% earnings per share (EPS) growth rate from 2020 to 2025.
Last month, Lincoln Electric reported fourth-quarter 2021 adjusted earnings of $1.61 per share. The bottom line rose 29.8% year over year. The company beat the Zacks Consensus Estimate of $1.55. Revenues of $844 million increased 21.7% year on year and surpassed the Consensus Estimate of $816 million.
Price Performance
Lincoln Electric’s shares have gained 6.2% in the past year against the industry’s decline of 18.6%.
Image Source: Zacks Investment Research
Zacks Rank & Stocks to Consider
Lincoln Electric currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Industrial Products sector include Applied Industrial Technologies, Inc. (AIT - Free Report) , Dover Corporation (DOV - Free Report) and Silgan Holdings Inc. (SLGN - Free Report) . While AIT sports a Zacks Rank #1 (Strong Buy), DOV and SLGN carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies reported adjusted EPS of $1.46 in second-quarter fiscal 2022 (ended Dec 31, 2020), up 49% year on year and beating the Zacks Consensus Estimate of $1.09. AIT has a trailing four-quarter earnings surprise of 27.9%, on average.
Applied Industrial Technologies has an expected earnings growth rate of 24.8% for fiscal 2022. The Zacks Consensus Estimate for fiscal year earnings has moved up 9.4% in the past 60 days. AIT’s shares have appreciated 20.2% in a year.
Dover’s fourth-quarter 2021 adjusted EPS increased 15% year over year to $1.78, beating the Zacks Consensus Estimate of $1.66. DOV has a trailing four-quarter earnings surprise of 12.3%, on average.
Dover has an estimated earnings growth rate of around 12.7% for 2022. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 5%. DOV’s shares have rallied around 32.1% in a year.
Silgan Holdings’ fourth-quarter 2021 adjusted EPS increased 32% year over year to a record 79 cents, beating the Zacks Consensus Estimate of 73 cents. SLGN has a trailing four-quarter earnings surprise of 3.8%, on average.
Silgan has a projected earnings growth rate of 13.5% for the current year. The Zacks Consensus Estimate for 2022 earnings has moved north by 3% in the past 60 days. In a year, SLGN has appreciated 11.7%.