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Altra Industrial Poised to Benefit from Solid Prospects

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Altra Industrial Motion Corporation’s (AIMC - Free Report) solid growth strategies make it a solid bet for investors now. It currently boasts a Zacks Rank #1 (Strong Buy).

In the last month, the company’s shares have yielded 10.82% return, outperforming 3.55% decline of the industry it belongs to.  

Why the Upgrade?

We believe that Altra Industrial Motion’s impressive financial performance in second-quarter 2017 and future outlook backed its share price rally in the last month. In the quarter, the company’s earnings per share and revenues surpassed their respective Zacks Consensus Estimate by 11.76% and 1.15%. Also, the bottom line grew 35.7% year over year on the back of benefits from the Stromag acquisition (acquired in January 2017), strengthening end markets and improving margin profile.

In the quarters ahead, the company is poised to gain from its diversified product portfolio and improving end-market conditions. Also, synergistic benefits from acquired assets and savings from cost-reduction initiatives are likely to be the other growth drivers. On the back of these expectations as well as impressive first-half results, the company increased its revenue guidance for 2017 to $850–$865 million from the previous projection of $840–$855 million. Non-GAAP earnings are anticipated to be $1.95–$2.05 per share, up from the earlier forecast of $1.83–$1.93.

Investors seem to be optimistic about Altra Industrial Motion’s future prospects, as evident from the positive revisions in earnings estimates for the stock. Over the last 30 days, the Zacks Consensus Estimate for the company increased 5.7% to $2.03 for 2017 and 6% to $2.28 for 2018. Also, the stock’s favorable ranking combined with Earnings ESP of +2.17% indicate a possible earnings beat in the third quarter.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.      

Other Stocks to Consider

Altra Industrial Motion has a market capitalization of approximately $1.3 billion. Other stocks worth considering in the industry include Kadant Inc. (KAI - Free Report) , Sun Hydraulics Corporation (SNHY - Free Report) and Barnes Group, Inc. (B - Free Report) . While both Kadant and Sun Hydraulics sport a Zacks Rank #1, Barnes Group carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kadant’s earnings estimates for 2017 and 2018 were revised upward in the last 60 days. Also, the company delivered an average positive earnings surprise of 19.29% in the last four quarters.

Sun Hydraulics pulled off an average positive earnings surprise of 3.47% for the last four quarters. Also, its earnings estimates for 2017 and 2018 improved in the last 60 days.

Barnes Group’s earnings estimates for 2017 and 2018 were revised upward in the last 60 days. Also, the company’s average earnings surprise for the last four quarters was a positive 11.60%.

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