We have issued an updated research report on Colfax Corporation (CFX - Free Report) on Oct 9.
This machinery company currently carries a Zacks Rank #3 (Hold), a downward revision from its earlier Zacks Rank #2 (Buy). Its market capitalization is approximately $4.2 billion.
A few growth drivers and certain headwinds, which might influence Colfax, have been discussed below.
Factors Favoring Colfax
Financial Performance & Bottom-Line Outlook: Colfax pulled-off a positive average earnings surprise of 7.91% in the last four quarters. This includes impact of 15.09% earnings beat recorded in the second quarter of 2018. Further, in the reported quarter, the company’s bottom line grew 35.6% year over year on the back of sales growth and lower tax rate.
For 2018, Colfax believes that strengthening Fabrication Technology business, restructuring initiatives, and margin growth in the Air & Gas Handling business will be beneficial. The company increased adjusted earnings per share projection to $2.15-$2.30 from $2.05-$2.20 stated earlier. The new forecast reflects earnings growth potential of at least 24%. Effective tax rate will be 20-22%, below the earlier prediction of 23-24%. Savings from restructuring actions are predicted to be in excess of $30 million.
In the past 60 days, earnings estimates on the stock for 2018 have been increased by two brokerage firms. Estimates for 2019 have been raised by three firms versus lowered by one. Currently, the Zacks Consensus Estimate for earnings is at $2.25 for 2018 and $2.50 for 2019, reflecting growth of 0.9% and 2% from respective 60-day-ago tallies. Further, bottom-line estimates represent year-over-year growth of 29.3% for 2018 and 11.2% for 2019.
Colfax Corporation Price and Consensus