Back to top

Image: Bigstock

Manitowoc (MTW) Rides on New Products and Cost Control

Read MoreHide Full Article

On Jan 13, we issued an updated research report on The Manitowoc Company Inc. MTW. Continued introduction of new products, productivity initiatives and cost controls will drive the company’s margins in the days ahead. Focus on growing its after-market business will also aid growth.

Upbeat 2019 Outlook

Manitowoc’s 2019 revenue guidance lies in the range of 1.85-$1.88 billion. The company is expected to report fourth-quarter and fiscal 2019 results on Feb 6. Compared with revenues of $1.85 billion reported in fiscal 2018, the mid-point of the guidance reflects year-over-year growth of 1%. The company’s fiscal 2019 EBITDA guidance is at $145-$160 million. The mid-point of the guidance suggests year-over-year growth of 31%.

Productivity Initiatives, Cost Control to Aid Margins

Continued introduction of new products, productivity initiatives and cost controls will help the company sustain margins despite challenging market conditions. Manitowoc continues to execute its strategy to counter cost inflation through pricing actions. The company also remains focused on cost control, reducing headcount, increasing productivity and eliminating waste.

It is also taking aggressive steps to support supply chain partners to ensure timely delivery of components, combined with alternative sourcing strategies. This will support its financial goals.

Aftermarket Business to be a Growth Driver

Manitowoc’s aftermarket business continues to perform well. Growth can primarily be attributed to higher-margin parts and services. The company remains focused on improving this crucial part of the business. Further, the company noted that there is scope of improving revenues from the Middle East. It continues to strengthen partnerships with channel partners in the region to capitalize on the recovery in the markets. Manitowoc’s focus on innovation in a bid to provide differentiated products that add value to its customers will aid it in maintaining its industry leading position.

As of the third quarter-end, Manitowoc’s net debt to adjusted EBITDA ratio remains a healthy 1.6. This will enable the company to implement growth strategies while meeting ongoing operational needs. The company also has a strong pipeline of acquisitions.

Poised Well for the Long Run

Manitowoc’s long-term outlook remains strong. The company remains committed to achieving its target of double-digit year-over-year operating margins improvement. In fact, the company anticipates achieving long-term target of double-digit operating margins by 2020 through continued streamlining organizational structure.

Price Performance

Shares of Manitowoc have gained 3.5% over the past year, compared with the industry’s rally of 10.2%.

Zacks Rank & Other Stocks to Consider

Manitowoc currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

Some other top-ranked stocks in the Industrial Products sector are Lawson Products, Inc. LAWS, Hickok Inc. CRAWA and DXP Enterprises, Inc. (DXPE - Free Report) . All of these stocks sport a Zacks Rank #1.

Lawson Products has an expected earnings growth rate of 59% for the current year. The stock has surged 83% over the past year.

Hickok has a projected earnings growth rate of 12.2% for 2020. The company’s shares have gained 77% over the past year.

DXP Enterprises has an estimated earnings growth rate of 10.5% for the ongoing year. In a year’s time, the company’s shares have appreciated 21%.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.

This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.

See their latest picks free >>

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

DXP Enterprises, Inc. (DXPE) - free report >>