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Manitowoc (MTW) Down 32% in Past 6 Months: Is Revival Likely?
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It has been tough for The Manitowoc Company (MTW - Free Report) , with its shares plunging 32.5% in the last 6 months, against the industry’s growth of 4.5%. Weaker-than-expected earnings in the first quarter of 2022, drop in order levels and a lowered outlook for the entire year have been impacting the stock’s performance.
In the past 60 days, the company’s earnings for 2022 and 2023 have witnessed downward revisions of 24% and 19%, respectively.
Factors Hurting the Stock
Manitowoc’s revenues in the first quarter of 2022 came in lower than its guidance, mainly due to the ongoing supply-chain and logistics challenges. The company’s orders plunged 21.6% sequentially to $481.5 million in the quarter, putting a brake on the sequential growth in orders witnessed by the company over the past three quarters. The Ukraine crisis, as well as the recent COVID measures in China, have aggravated the global macroeconomic turmoil. The company anticipates that the recent inflation, particularly in Europe, besides further deterioration in the supply chain, will add to the pressure on its top line and margins throughout the remainder of 2022.
Image Source: Zacks Investment Research
Manitowoc, thus, expects adjusted EBITDA to come in at the lower end of the earlier provided guidance. It had earlier guided revenues in the range of $2.0 billion to $2.2 billion, adjusted EBITDA in the range of $130-$160 million and adjusted EPS between 65 cents and $1.35.
Manitowoc anticipates the ongoing global supply-chain and logistic challenges, inflationary pressures, and an unstable labor market to impact results through the first half of 2022. In the second half of 2022, the company expects these headwinds to subside. It expects adjusted SG&A expenses to increase 21% during the year. Of this, $32 million is likely to be from acquisitions.
Nevertheless, Manitowoc’s innovation pipeline remains robust. Focus on innovation will continue to aid it in leading the industry by providing differentiated products that add value to customers. The company has also been taking necessary steps to align production with changing levels of demand. It has remained focused on cutting costs, increasing productivity and eliminating waste. Operational focus, healthy balance sheet and market leading products position it well to capitalize as end markets recover. We believe that these factors will eventually benefit Manitowoc’s results and help its share price post a turnaround.
Despite the downward revision in estimates, the earnings estimate for 2022 is currently pegged at 87 cents, projecting growth of 1%. The estimate of $1.41 for 2023 indicates year-on-year growth of 62%.
Manitowoc currently carries a Zacks Rank #4 (Sell).
Graphic Packaging has an estimated earnings growth rate of 86.8% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 7.6%.
Graphic Packaging pulled off a trailing four-quarter earnings surprise of 7.2%, on average. The company’s shares have appreciated 8% in the past six months.
Myers Industries has an expected earnings growth rate of 67% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 27% in the past 60 days.
MYE has a trailing four-quarter earnings surprise of 20.1%, on average. Myers Industries’ shares have risen 25% over the last six months.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings rose 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have risen 16% in the past six months.
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Manitowoc (MTW) Down 32% in Past 6 Months: Is Revival Likely?
It has been tough for The Manitowoc Company (MTW - Free Report) , with its shares plunging 32.5% in the last 6 months, against the industry’s growth of 4.5%. Weaker-than-expected earnings in the first quarter of 2022, drop in order levels and a lowered outlook for the entire year have been impacting the stock’s performance.
In the past 60 days, the company’s earnings for 2022 and 2023 have witnessed downward revisions of 24% and 19%, respectively.
Factors Hurting the Stock
Manitowoc’s revenues in the first quarter of 2022 came in lower than its guidance, mainly due to the ongoing supply-chain and logistics challenges. The company’s orders plunged 21.6% sequentially to $481.5 million in the quarter, putting a brake on the sequential growth in orders witnessed by the company over the past three quarters. The Ukraine crisis, as well as the recent COVID measures in China, have aggravated the global macroeconomic turmoil. The company anticipates that the recent inflation, particularly in Europe, besides further deterioration in the supply chain, will add to the pressure on its top line and margins throughout the remainder of 2022.
Image Source: Zacks Investment Research
Manitowoc, thus, expects adjusted EBITDA to come in at the lower end of the earlier provided guidance. It had earlier guided revenues in the range of $2.0 billion to $2.2 billion, adjusted EBITDA in the range of $130-$160 million and adjusted EPS between 65 cents and $1.35.
Manitowoc anticipates the ongoing global supply-chain and logistic challenges, inflationary pressures, and an unstable labor market to impact results through the first half of 2022. In the second half of 2022, the company expects these headwinds to subside. It expects adjusted SG&A expenses to increase 21% during the year. Of this, $32 million is likely to be from acquisitions.
Nevertheless, Manitowoc’s innovation pipeline remains robust. Focus on innovation will continue to aid it in leading the industry by providing differentiated products that add value to customers. The company has also been taking necessary steps to align production with changing levels of demand. It has remained focused on cutting costs, increasing productivity and eliminating waste. Operational focus, healthy balance sheet and market leading products position it well to capitalize as end markets recover. We believe that these factors will eventually benefit Manitowoc’s results and help its share price post a turnaround.
Despite the downward revision in estimates, the earnings estimate for 2022 is currently pegged at 87 cents, projecting growth of 1%. The estimate of $1.41 for 2023 indicates year-on-year growth of 62%.
Manitowoc currently carries a Zacks Rank #4 (Sell).
Key Picks
Some better-ranked stocks in the Industrial Products sector are Graphic Packaging Holding Company (GPK - Free Report) , Myers Industries (MYE - Free Report) and Packaging Corporation of America (PKG - Free Report) . All of these stocks sport a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Graphic Packaging has an estimated earnings growth rate of 86.8% for the current year. In the past 60 days, the Zacks Consensus Estimate for current-year earnings has been revised upward by 7.6%.
Graphic Packaging pulled off a trailing four-quarter earnings surprise of 7.2%, on average. The company’s shares have appreciated 8% in the past six months.
Myers Industries has an expected earnings growth rate of 67% for 2022. The Zacks Consensus Estimate for the current year’s earnings has moved up 27% in the past 60 days.
MYE has a trailing four-quarter earnings surprise of 20.1%, on average. Myers Industries’ shares have risen 25% over the last six months.
Packaging Corporation has an expected earnings growth rate of 16.2% for 2022. The Zacks Consensus Estimate for the current year’s earnings rose 4.2% in the past 60 days.
PKG has a trailing four-quarter earnings surprise of 19.6%, on average. Packaging Corporation’s shares have risen 16% in the past six months.