We issued an updated research report on machinery company Rexnord Corporation on Dec 8, 2016. The company manufactures and sells process and motion control, and water management products. It currently has a market capitalization of approximately $2.1 billion.

Over the last three months, shares of Rexnord Corporation yielded a negative return of 1.9%, as against a 4.8% gain by the Zacks categorized Machinery Electrical industry.

Rexnord Corporation offers its process and motion control products to a wide customer base in various end markets including mining, general industrial applications, cement, agriculture, forest and wood products, petrochemical, energy, food and beverage, and aerospace and wind energy. Its water management products are widely used in infrastructure construction, commercial construction and residential construction markets. We believe these markets are largely influenced by the economic health of the country or the global market, at large. For fiscal 2017, the company anticipates a decline of low-single digit in the U.S. & Canada Industrial Distribution end market and high-double digits in global process industries.

International operations have exposed Rexnord to risks arising from negative foreign currency translation and geo-political issues. For instance, in first-half fiscal 2017, adverse foreign currency movements lowered the company’s revenues by 1% over the year-ago period. In addition, active competition in the industry might negatively impact Rexnord.

For fiscal 2017, Rexnord Corporation has lowered its adjusted earnings guidance to $1.32–$1.38  per share from the previous projection of $1.47−$1.57 while core sales are now predicted to decline roughly 3% as against the earlier guided range of (2%)−1%. The downward revision was primarily due to extension of project timelines in Middle East and uneven growth in the U.S. non-residential construction market.

In addition, President-elect Donald Trump’s unfavorable view toward Rexnord’s decision to close its Indianapolis plant and moving hundreds of jobs to Mexico and Texas might hinder the company’s restructuring moves.

Rexnord Corporation currently carries a Zacks Rank #5 (Strong Sell). Over the last 60 days, the Zacks Consensus Estimate for the stock has decreased 13.2% to $1.32 per share for fiscal 2017 and 9.3% to $1.56 per share for fiscal 2018.

Some better-ranked stocks in the machinery industry include Enersys Inc. (ENS Quick QuoteENS - Free Report) , II-VI Incorporated and Applied Industrial Technologies, Inc. (AIT Quick QuoteAIT - Free Report) . While Enersys and II-VI Incorporated sport a Zacks Rank #1 (Strong Buy), Applied Industrial Technologies carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Enersys Inc’s earnings estimates for fiscal 2017 improved over the last 60 days. It has an average positive earnings surprise of 3.01% for the trailing four quarters.

II-VI Incorporated reported better-than-expected results in the last four quarters, with a positive average earnings surprise of 39.80%. Also, bottom-line expectations for fiscal 2017 and fiscal 2018 have improved over the past 60 days.

Applied Industrial Technologies’ earnings estimates for fiscal 2017 and fiscal 2018 have been revised upward over the last 60 days. Average earnings surprise for the last four quarters is a positive 4.93%.

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