We have issued an updated research report on Graco Inc. (GGG - Free Report) on Sep 2.
The company currently carries a Zacks Rank #4 (Sell). Its market capitalization is approximately $7.6 billion.
Let’s delve deeper and discuss what led to its poor investment appeal.
Weak Share Price Performance, Over-Valuation and Lowered Estimates: Market sentiments have been against Graco for quite some time now. Its stock price has decreased roughly 4.4% in the past three months compared with the industry’s growth of 2.4%. Also, it is worth noting that shares of the company have lost 11% since the release of second-quarter 2019 results on Jul 24, 2019.
The company’s shares currently seem overvalued compared with the industry, using the P/E (TTM) valuation method. The stock’s current multiple is 23.98x, higher than the industry’s multiple of 20.16x. Also, shares of Graco are trading above the industry's three-month highest level of 20.50x. This makes us cautious about the stock.
Furthermore, earnings estimates for the company for 2019 and 2020 have been lowered in the past 60 days. Currently, the Zacks Consensus Estimate for its earnings is pegged at $1.91 for 2019 and $2.05 for 2020, reflecting declines of 4.5% and 4.7% from the respective 60-day-ago numbers.
Graco Inc. Price and Consensus