Lincoln Electric Holdings Inc. (LECO): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report


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We are upgrading our recommendation on Lincoln Electric from Neutral to Outperform with a target price of $81.00. In the third-quarter 2014, Lincoln Electric's adjusted earnings increased 9% year over year to $0.94 per share. Revenues rose 3.5% led by widespread demand across the key segments. Lincoln Electric will benefit from improving end market trends in the general fabrication and structural sectors. Demand for innovative solutions, benefits from strategic initiatives and accelerated returns will also drive growth. Additionally, Lincoln Electric continues to undertake initiatives to provide improved returns through acquisitions. Moreover, further share repurchases and dividends will also benefit Lincoln Electric.


Headquartered in Cleveland, OH, Lincoln Electric has more than 48 manufacturing locations, including operations and joint ventures in 19 countries and a worldwide network of distributors and sales offices covering more than 160 countries.

Lincoln is a full-line manufacturer and reseller of welding and cutting products. The company's welding products range from welding power sources, wire feeding systems, robotic welding packages, fume extraction equipment, consumables and fluxes to regulators and torches used in cutting. The level of product technology varies from basic units used in light manufacturing to sophisticated robotic applications used in high-production welding and fabrication.

Lincoln Electric produces three types of arc welding electrodes including stick electrodes, solid electrodes used for continuous feeding in mechanized welding, and cored electrodes that are also used for mechanized welding. Arc welding is carried out in many industries. The metal working field involves production of arc welding in transportation, construction, fabrication, petrochemical and other industries. Also, in the manufacture of metal products, arc welding applications range from production of consumer appliances to fabrication of heavy machinery and structural steel. Arc welding is the dominant joining method for building and other industrial construction, including oil and gas pipeline fabrication, and oil refinery construction. The company sells its products in both domestic and international markets.

Lincoln has five operating segments, namely North America Welding, Europe Welding, Asia Pacific Welding, South America Welding and The Harris Products Group. The North America Welding segment comprises operations in the United States, Canada and Mexico. The Europe Welding, Asia Pacific Welding, South America Welding segments contain welding operations in Europe, Asia Pacific and South America, respectively. The fifth segment, The Harris Products Group, includes the company's global cutting, soldering and brazing businesses as well as the retail business in the United States.

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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 Nasdaq, Inc.

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