Gibraltar Industries Down to Strong Sell - Analyst Blog


On Jan 2, Zacks Investment Research downgraded Gibraltar Industries, Inc. ( ROCK ) to a Zacks Rank #5 (Strong Sell) based on the slower-than-expected pace of the construction industry.

Why the Downgrade?

According to a recent report from the American Institute of Architects (AIA), the Architecture Billings Index (ABI) for November fell below the appropriate level. The ABI for November was recorded at 49.8, down from 51.6 recorded in October. This also compared unfavorably to the fact that an ABI score of 50 or above is taken to be a positive signal.

The ABI indicates roughly 9 to 12 months lead time between architecture billings and construction spending. While commercial/industrial ABI was 48.6, institutional ABI was recorded at 47.7. The uncertainty of the Government spend continues to hover around the institutional construction activities.

Gibraltar Industries has been facing the brunt of reduction in the Industrial revenues over the past few quarters. In the third quarter of 2013,the company experienced a negative trend in the industrial and infrastructure markets, which led to a year-over-year decline in the organic sales. The company expects the segments to remain weak in the coming quarters with little scope of improvement.

The company is expected to release its fourth-quarter 2013 results on Feb 20. The Zacks Consensus Estimate for the same stands at 5 cents, reflecting a year-over-year decline of 10%.

Gibraltar Industries manufactures and distributes products to the industrial and buildings market. The products range from ventilation and expanded metal to mail storage solutions and rain dispersion products and solutions.

Other Stocks to Consider

Gibraltar Industries currently has a market capitalization of $565.4 million. Some better-ranked stocks in the industry include CaesarStone Sdot-Yam Ltd. ( CSTE ), James Hardie Industries plc ( JHX ) and Armstrong World Industries, Inc. ( AWI ). While CaesarStone and James Hardie Industries carry a Zacks Rank #1 (Strong Buy), Armstrong World Industries holds a Zacks Rank #2 (Buy).

ARMSTRONG WORLD (AWI): Free Stock Analysis Report

CAESAR STONE SD (CSTE): Free Stock Analysis Report

JAMES HARDI-ADR (JHX): Free Stock Analysis Report

GIBRALTAR INDUS (ROCK): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ABI , AIA , AWI , CSTE , JHX

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