We have issued an updated research report on The Middleby Corporation (MIDD - Free Report) on Nov 22.
The company, with a market capitalization of $6.4 billion, currently carries a Zacks Rank #3 (Hold). It specializes in manufacturing cooking, warming, food preparation and packaging equipment, especially meant for use in industrial processing, commercial and residential markets.
Many tailwinds and headwinds are impacting its performance. Let’s delve deeper.
Factors Favoring Middleby
Operating Conditions: The company operates through three segments — Commercial Foodservice Equipment Group, Food Processing Equipment Group and Residential Kitchen Equipment Group.
Middleby anticipates acquired assets, expansion in international businesses and effective marketing initiatives to aid Commercial Foodservice Equipment Group. Also, it expects technologically-advanced products and solutions as well as the increasing adoption of ventless cooking equipment to be beneficial.
In addition, Residential Kitchen Equipment Group will likely gain from Viking products as well as focus on product introductions and residential showrooms. Product launches and innovation investments might aid Food Processing Equipment Group.
Buyouts: Middleby has been benefiting from acquired assets. In 2018, it added Hinds-Bock, Ve.Ma.C, Firex, Josper, Taylor, M-TEK, Crown Food Service Equipment and EVO buyout assets to its portfolio.
Middleby acquired Cooking Solutions Group of Standex International Corporation (SXI - Free Report) in April 2019. Since then, the buyout has been fortifying Middlebys’ portfolio of cooking products. In the same month, the company acquired Powerhouse Dynamics, adding more value to its Connect IoT platform.
Thereafter, Middleby bought Ss Brewtech in June and Packaging Progressions in July. Recently, the company acquired Brava Home. The buyout is expected to expand Middleby’s product offerings in residential and commercial markets.
Earnings Estimate Trend: The company reported better-than-expected results in the third quarter of 2019, with earnings surpassing estimates by 5.52%. Its average earnings surprise for the last four quarters was a positive 3.03%.
Going forward, the company stands to benefit from the focus on product innovation, improving selling techniques, solid offerings to customers and focus on growth markets. Also, various profitability actions will likely be beneficial.
Earnings estimates for the company have been raised in the past 30 days. The Zacks Consensus Estimate for Middleby’s earnings is pegged at $6.74 for 2019 and $7.43 for 2020, suggesting growth of 3.4% and 1.2% from the respective 30-day-ago figures.
The Middleby Corporation Price and Consensus