We issued an updated research report on Rexnord Corporation (RXN - Free Report) on Oct 15.
This machinery company currently carries a Zacks Rank #3 (Hold). Its market capitalization is approximately $2.8 billion.
A few growth drivers and certain headwinds, which might influence Rexnord, have been discussed below.
Factors Favoring Rexnord
Impressive Bottom-Line Projections: Rexnord pulled off a positive earnings surprise of 13.89% for the first quarter of fiscal 2019 (ended Jun 30, 2018). For the rest of the quarters of fiscal 2019 (ending March 2019), the company anticipates benefiting from innovative products, buyouts and solid product demand in end-market served. Further, it believes that supply-chain optimization and footprint-repositioning programs will be boons.
For fiscal 2019, core sales are projected to grow in a mid-single digit. Net income is anticipated to be $132-$143 million versus $129-$143 million stated earlier. The revised guidance has a mid-point of $137.5 million, higher than the previous projection’s mid-point of $136 million.
In the long term, the company targets achieving mid-single-digit core growth and 30% profit margin.
Moreover, the Zacks Consensus Estimate for earnings on the stock is pegged at $1.70 per share for fiscal 2019 and $1.96 for fiscal 2020 (ending March 2020), representing year-over-year growth of 22.3% and 15.5%, respectively. Additionally, the company’s earnings are estimated to increase 16.4% in the next three to five years, higher than 14.2% projected for the industry.
Rexnord Corporation Price and Consensus