Earnings estimates for
Gibraltar Industries, Inc.
) have trended higher since this building products company expanded
its portfolio with three acquisitions in three key U.S. markets.
The company also released encouraging preliminary numbers for the
upcoming quarter, which will be announced in late February.
With a recovering housing market, strong product portfolio,
expansion opportunities and a bright outlook, this Zacks Rank #1
(Strong Buy) stock offers an attractive investment opportunity.
Acquisition Update and Favorable Preliminary
On Jan 15, Gibraltar Industries announced that it boosted its
portfolio and expanded its customer base with the acquisition of
assets from three businesses. The acquisitions were made between
Nov 14 and Dec 28, 2012. They have strengthened ROCK's position in
three key U.S. markets, namely (1) sun protection products for new
residential construction and home remodeling; (2) function-critical
components for public infrastructure construction and maintenance;
and (3) perforated metal products for industrial and automotive
Following the acquisitions, Gibraltar Industries is now confident
of reporting strong fourth quarter results, scheduled for Feb 22,
2013. The company expects adjusted earnings per share between 1
cent and 5 cents, compared to the prior-year loss of 17 cents.
Sales are expected between $171 million and $173 million, compared
with $174 million in the fourth quarter of 2011. The company
expects adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) in the range of $13 million to $14 million,
versus $3 million in the prior-year quarter.
Adjusted earnings are expected between 62 cents and 66 cents for
2012, significantly higher than the 50 cents reported in the
prior-year. The company projects sales of $788 million to $790
million, up approximately 3% from 2011. Adjusted EBITDA for the
year is expected at $78 million to $80 million, a 3% to 5%
The Zacks Consensus Estimate for the fourth quarter stands at 3
cents per share, up 114.7% from the prior year quarter. For 2012,
the Zacks Consensus Estimate is 63 cents per share, up 35.1%.
Surge in Earnings Estimates
Over the past 60 days, the Zacks Consensus Estimate for 2012 has
gone up 8.6% to 63 cents per share, reflecting year-over-year
growth of 35.1%. The Zacks Consensus Estimate for 2013 is up 12.2%
to 92 cents per share over the same timeframe, suggesting
year-over-year growth of 44.1%.
Gibraltar Industries currently trades at a forward price to
earnings (P/E) ratio of 18.7, reflecting a premium of 43.9% to the
peer group average of 13.0. Similarly, it currently trades at a
price-to-sales (P/S) multiple of 0.66, reflecting a 73.7% premium
to the peer group average of 0.38. However, given the company's
compelling fundamentals, the premium is justified. The P/B multiple
for both the stock and the peer group average stands at 1.1.
Shares of Gibraltar Industries have been rising sharply since
mid-Nov 2012, following its strong third quarter results and the
acquisitions. The stock is currently trading above its 50- and
200-day moving averages, which stand at $14.63 and $12.35,
respectively. In fact, the stock has consistently traded above its
50- and 200-day moving averages since late-November. Volume
averages roughly 92K daily.
Based in Buffalo, New York, Gibraltar Industries, Inc. is a
manufacturer, processor and distributor of residential and
commercial building products and processed metal products for the
building and construction, industrial, and automotive markets. The
company serves customers across North America and Europe. The
market cap of the company is $518.1 million.
Other stocks in the basic material sector worth considering are
) with a Zacks Rank #1 (Strong Buy) and Commercial Metals Co. (
) with a Zacks Rank #2 (Buy).
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