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IHI CORP (IHICY) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of IHI CORP (IHICY - Free Report) ? Shares have been on the move with the stock up 31% over the past month. The stock hit a new 52-week high of $7.56 in the previous session. IHI CORP has gained 52.7% since the start of the year compared to the -13.7% move for the Zacks Industrial Products sector and the -18.6% return for the Zacks Manufacturing - General Industrial industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 10, 2022, IHI CORP reported EPS of $0.55 versus consensus estimate of $0.27 while it missed the consensus revenue estimate by 9.65%.
For the current fiscal year, IHI CORP is expected to post earnings of $0.70 per share on $11.19 billion in revenues. This represents a -28.57% change in EPS on a 7.42% change in revenues. For the next fiscal year, the company is expected to earn $0.90 per share on $11.9 billion in revenues. This represents a year-over-year change of 28.57% and 6.35%, respectively.
Valuation Metrics
IHI CORP may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
IHI CORP has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 10.8X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.2X. On a trailing cash flow basis, the stock currently trades at 5.1X versus its peer group's average of 14.3X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, IHI CORP currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if IHI CORP meets the list of requirements. Thus, it seems as though IHI CORP shares could have a bit more room to run in the near term.
How Does IHICY Stack Up to the Competition?
Shares of IHICY have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Wolseley PLC (FERG - Free Report) . FERG has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. Wolseley PLC beat our consensus estimate by 11.56%, and for the current fiscal year, FERG is expected to post earnings of $8.87 per share on revenue of $27.35 billion.
Shares of Wolseley PLC have gained 6.2% over the past month, and currently trade at a forward P/E of 13.56X and a P/CF of 14.65X.
The Manufacturing - General Industrial industry is in the top 40% of all the industries we have in our universe, so it looks like there are some nice tailwinds for IHICY and FERG, even beyond their own solid fundamental situation.
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IHI CORP (IHICY) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of IHI CORP (IHICY - Free Report) ? Shares have been on the move with the stock up 31% over the past month. The stock hit a new 52-week high of $7.56 in the previous session. IHI CORP has gained 52.7% since the start of the year compared to the -13.7% move for the Zacks Industrial Products sector and the -18.6% return for the Zacks Manufacturing - General Industrial industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on May 10, 2022, IHI CORP reported EPS of $0.55 versus consensus estimate of $0.27 while it missed the consensus revenue estimate by 9.65%.
For the current fiscal year, IHI CORP is expected to post earnings of $0.70 per share on $11.19 billion in revenues. This represents a -28.57% change in EPS on a 7.42% change in revenues. For the next fiscal year, the company is expected to earn $0.90 per share on $11.9 billion in revenues. This represents a year-over-year change of 28.57% and 6.35%, respectively.
Valuation Metrics
IHI CORP may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
IHI CORP has a Value Score of A. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 10.8X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.2X. On a trailing cash flow basis, the stock currently trades at 5.1X versus its peer group's average of 14.3X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, IHI CORP currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if IHI CORP meets the list of requirements. Thus, it seems as though IHI CORP shares could have a bit more room to run in the near term.
How Does IHICY Stack Up to the Competition?
Shares of IHICY have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Wolseley PLC (FERG - Free Report) . FERG has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of C.
Earnings were strong last quarter. Wolseley PLC beat our consensus estimate by 11.56%, and for the current fiscal year, FERG is expected to post earnings of $8.87 per share on revenue of $27.35 billion.
Shares of Wolseley PLC have gained 6.2% over the past month, and currently trade at a forward P/E of 13.56X and a P/CF of 14.65X.
The Manufacturing - General Industrial industry is in the top 40% of all the industries we have in our universe, so it looks like there are some nice tailwinds for IHICY and FERG, even beyond their own solid fundamental situation.