On Jan 2, Zacks Investment Research downgraded
Gibraltar Industries, Inc.
) 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
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
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.
James Hardie Industries plc
Armstrong World Industries, Inc.
). 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
CAESAR STONE SD (CSTE): Free Stock Analysis
JAMES HARDI-ADR (JHX): Free Stock Analysis
GIBRALTAR INDUS (ROCK): Free Stock Analysis
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