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Brady Corporation (BRC) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Brady (BRC - Free Report) ? Shares have been on the move with the stock up 4.6% over the past month. The stock hit a new 52-week high of $63.02 in the previous session. Brady has gained 7.1% since the start of the year compared to the 2.4% move for the Zacks Industrial Products sector and the 1.4% return for the Zacks Security and Safety Services 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 November 16, 2023, Brady reported EPS of $1 versus consensus estimate of $0.97.
Valuation Metrics
Brady 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.
Brady has a Value Score of B. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 15.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.6X. On a trailing cash flow basis, the stock currently trades at 14.3X versus its peer group's average of 16.3X. Additionally, the stock has a PEG ratio of 2.25. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Brady 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 Brady passes the test. Thus, it seems as though Brady shares could have a bit more room to run in the near term.
How Does BRC Stack Up to the Competition?
Shares of BRC 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 MSA Safety Incorporporated (MSA - Free Report) . MSA has a Zacks Rank of # 1 (Strong Buy) and a Value Score of F, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. MSA Safety Incorporporated beat our consensus estimate by 8.99%, and for the current fiscal year, MSA is expected to post earnings of $7.73 per share on revenue of $1.88 billion.
Shares of MSA Safety Incorporporated have gained 5.7% over the past month, and currently trade at a forward P/E of 22.94X and a P/CF of 20.6X.
The Security and Safety Services industry is in the top 15% of all the industries we have in our universe, so it looks like there are some nice tailwinds for BRC and MSA, even beyond their own solid fundamental situation.
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Brady Corporation (BRC) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Brady (BRC - Free Report) ? Shares have been on the move with the stock up 4.6% over the past month. The stock hit a new 52-week high of $63.02 in the previous session. Brady has gained 7.1% since the start of the year compared to the 2.4% move for the Zacks Industrial Products sector and the 1.4% return for the Zacks Security and Safety Services 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 November 16, 2023, Brady reported EPS of $1 versus consensus estimate of $0.97.
Valuation Metrics
Brady 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.
Brady has a Value Score of B. The stock's Growth and Momentum Scores are A and C, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 15.7X current fiscal year EPS estimates, which is not in-line with the peer industry average of 20.6X. On a trailing cash flow basis, the stock currently trades at 14.3X versus its peer group's average of 16.3X. Additionally, the stock has a PEG ratio of 2.25. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Brady 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 Brady passes the test. Thus, it seems as though Brady shares could have a bit more room to run in the near term.
How Does BRC Stack Up to the Competition?
Shares of BRC 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 MSA Safety Incorporporated (MSA - Free Report) . MSA has a Zacks Rank of # 1 (Strong Buy) and a Value Score of F, a Growth Score of A, and a Momentum Score of A.
Earnings were strong last quarter. MSA Safety Incorporporated beat our consensus estimate by 8.99%, and for the current fiscal year, MSA is expected to post earnings of $7.73 per share on revenue of $1.88 billion.
Shares of MSA Safety Incorporporated have gained 5.7% over the past month, and currently trade at a forward P/E of 22.94X and a P/CF of 20.6X.
The Security and Safety Services industry is in the top 15% of all the industries we have in our universe, so it looks like there are some nice tailwinds for BRC and MSA, even beyond their own solid fundamental situation.