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DXP Enterprises Lowered to Strong Sell on Weak Prospects
Zacks Investment Research downgraded DXP Enterprises, Inc. (DXPE - Free Report) to a Zacks Rank #5 (Strong Sell) on Jun 30, 2016. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of underperforming the broader market over the next few quarters.
Why the Downgrade?
Market sentiments have been weak for DXP Enterprises as evident from a 34.7% fall in the company’s share price year-to-date and a roughly 14% decline since the release of first-quarter 2016 results on May 12. The company recorded a loss of 35 cents per share, way below the Zacks Consensus Estimate of 9 cents earnings per share.
Last quarter, DXP Enterprises faced headwinds from lower capital spending by its customers in the oil & gas industry due to weak oil prices. Also, unfavorable foreign currency movements and its impact on export demand adversely affected the company’s top-line. In the quarters ahead, though the negative impacts of these headwinds are easing a bit, these can pose concerns for the company.
Bleak prospects have rendered investors doubtful regarding DXP Enterprises’ performance in the quarters ahead. Over the last 60 days, the Zacks Consensus Estimate for the stock has decreased from earnings of 44 cents per share to loss of 38 cents for 2016 and from 80 cents to 28 cents per share for 2017.
DXP ENTERPRISES Price and Consensus
DXP ENTERPRISES Price and Consensus | DXP ENTERPRISES Quote
Stocks to Consider
DXP Enterprises currently has a market capitalization of $215 million. Though the company is off the investors’ radar, there are some stocks in the machinery industry with higher investment values. Better-ranked stocks include Kadant Inc. (KAI - Free Report) , Nordson Corporation (NDSN - Free Report) and Altra Industrial Motion Corp. . While both Kadant and Nordson Corporation sport a Zacks Rank #1 (Strong Buy), Altra Industrial Motion carries a Zacks Rank #2 (Buy).
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