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Nordson Hits 52-Week High on Organic, Inorganic Prospects

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Shares of Nordson Corporation (NDSN - Free Report) , a precision dispensing equipment manufacturer, reached a new 52-week high of $116.01 during its trading session on Jan 4. This apex improved upon the last 52-week high of $115.69 on Dec 21.

Post the release of fourth-quarter fiscal 2016 (ended Oct 31, 2016) results on Dec 14, 2016, shares of the company yielded 5% return, outperforming the negative return of 0.5% generated by the Zacks categorized Machinery General Industrial industry.

On Jan 4, Nordson Corporation closed its trading session at $115.94, yielding year-to-date return of roughly 3.5%. The trading volume for the session was 0.36 million shares. Positive earnings estimate revisions for fiscal 2017 and 2018, along with an expected earnings growth rate of 15% for the next five years indicate the stock’s potential for further price appreciation.

Growth Drivers

Nordson Corporation’s financial performance has been impressive over the last four quarters, as evident from an average positive earnings surprise of 15.40%. In the last reported quarter, the company surpassed the Zacks Consensus Estimate for earnings by 13.01% and for revenues by 5.6%.

In first-quarter fiscal 2017, Nordson Corporation anticipates benefiting from improved backlog, healthy order rates and organic growth as well as from sound response from customers in the electronics and medical end markets. Sales in the quarter are likely to increase in a range of 4−8%, including organic sales growth of 6−10%. Operating margin is predicted to be roughly 18%.

In addition, Nordson Corporation’s innovative product offerings will prove beneficial in the quarters ahead. In Dec 2016, the company introduced PureFlow hoses with RediFlex II mounts. The product has been designed to curtail the effects of adhesive degradation and hence, improve the life of hoses in high-performance environments. Also, the company believes in expanding its business through inorganic efforts as well as rewarding its shareholders through share buyback and dividend payments.

Estimate Revisions Show Potency

Over the last 30 days, the Zacks Consensus Estimate for Nordson Corporation grew 2.7% to $5.00 for fiscal 2017 and 1.9% to $5.39 for fiscal 2018. The earnings estimates represent year-over-year growth of 6.8% for fiscal 2017 and 7.9% for fiscal 2018.

NORDSON CORP Price and Consensus

 

NORDSON CORP Price and Consensus | NORDSON CORP Quote

With a market capitalization of $6.7 billion, Nordson Corporation currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the machinery industry include Altra Industrial Motion Corporation , RBC Bearings Incorporated and Sun Hydraulics Corporation . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Altra Industrial Motion Corporation’s financial performance has been impressive, with an average positive earnings surprise of 8.06% for the last four quarters. Also, earnings estimates for 2017 improved over the last 30 days.

RBC Bearings Incorporated’s financial performance has been impressive, with an average positive earnings surprise of 1.60% for the last four quarters. Also, earnings estimates for fiscal 2017 remained stable while improved for fiscal 2018, over the last 30 days.

Sun Hydraulics Corporation’s earnings estimates for 2017 improved over the past 30 days.

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