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Raven Industries Down to Strong Sell - Analyst Blog
On Mar 7, Zacks Investment Research downgraded Raven Industries Inc. ( RAVN ) to Zacks Rank#5 (Strong Sell).
Why the Downgrade?
Raven Industries has witnessed downward estimate revisions and hit its 52-week low after reporting disappointing results for third-quarter 2013 on Nov 20. Earnings estimates of this industrial manufacturer of products have been on the downside on the back of a tepid fourth quarter outlook due to continued macro weakness related to energy exploration and defense spending and continued headwinds for Raven's segments.
Raven's third-quarter earnings per share of 30 cents missed the Zacks Consensus Estimate of 34 cents. On a year-over-year basis, earnings dipped 3%.
Raven's Aerostar will continue to be impacted by a lack of aerostat orders and the continued energy market weakness will impede Engineered Films segment's performance. Margins in the Applied Technology segment will be under pressure due to the company's heightened investments in new initiatives and the resultant increase in research and development and selling, general and administrative expenses. Furthermore, given the company's performance so far in 2013 and expectations of a difficult fourth-quarter, the long-term earnings growth target of 10-15% seems unlikely in the current year.
Over the last 60 days, the Zacks Consensus Estimate for Raven for 2013 decreased 4% to $1.39 per share while for 2014; it went down 11% to $1.42 per share.
Other Stocks to Consider
Among the other stocks in the same industry, Crane Co. ( CR ), Macquarie Infrastructure Company LLC ( MIC ) and Tyco International Ltd. ( TYC ) hold a Zacks Rank#2 (Buy) and are favorable options for investors.
CRANE CO (CR): Free Stock Analysis Report
MACQUARIE INFRA (MIC): Free Stock Analysis Report
RAVEN INDS INC (RAVN): Free Stock Analysis Report
TYCO INTL LTD (TYC): Free Stock Analysis Report
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Zacks Investment Research