On Jun 1, Zacks Investment Research downgraded
Briggs & Stratton Corporation
) to Zacks Rank#5 (Strong Sell).
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Why the Downgrade?
Briggs & Stratton's share price and earnings estimates have
witnessed a downward trend after reporting disappointing third
quarter 2013 results and a trimmed fiscal 2013 guidance on Apr
19. Earnings estimates of this manufacturer of gasoline engines
for lawn and garden equipment applications and portable
generators have been on the downside due to a weak fiscal 2013
outlook, which was due to the soft demand across international
markets and a slow start to the U.S. lawn and garden market this
Briggs & Stratton's third-quarter 2013 adjusted earnings
declined 10% year over year to 89 cents per share and also missed
the Zacks Consensus Estimate of $1.08 by 18%. Results were
affected by reduced sales of engines and products to
international regions as well as by the company's decision to
stop selling lawn and garden products to large retailers in the
For fiscal 2013, Briggs & Stratton trimmed its net sales
guidance from the range of $1.95 billion to $2.15 billion to the
new range of $1.95 billion to $2.0 billion. The company now
expects adjusted net income in the range of $56 million - $65
million, down from its previous guidance of $60 million - $75
million. Forecast for earnings per share has also been reduced
from the range of $1.25 to $1.55 per share to the band of $1.16
to $1.33 per share.
Briggs & Stratton continues to witness weakness in sales in
several of its international markets, particularly in Australia
and New Zealand due to continued impact of drought conditions and
in Europe owing to weak market conditions. In U.S., the spring
lawn and garden season has been delayed due to a prolonged cold
and wet spring in many parts of the country. This is unlike the
previous year when spring had arrived early in the U.S. with
significantly above average temperatures in February and March.
Over the last 60 days, the Zacks Consensus Estimate for Briggs
& Stratton for fiscal 2013 decreased 17% to $1.15 per share;
while for fiscal 2014 it went down 1% to $1.67 per share.
Other Stocks to Consider
Not all stocks in the same industry are performing as poorly as
Briggs & Stratton. Other companies in the machinery and farm
industry with favorable Zacks Ranks are
) with a Zacks Rank#1 (Strong Buy), while
Alamo Group, Inc.
CNH Global NV
) carry a Zacks Rank #2 (Buy).