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Middleby Faces Both Bearish & Bullish Aspects, Kept On Hold

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We issued an updated research report on the premium diversified machinery company Middleby Corp.MIDD on Sep 28, 2015. The company provides cooking, warming, food preparation and packaging equipment for commercial, industrial processing and residential markets. Since 1983, the company has significantly improved the scale of its operations with strategic moves. However, it currently faces certain risks associated with external headwinds.

Bullish Aspects

Superior performance of Middleby's Commercial Foodservice Equipment Group and Residential Kitchen Equipment Group has been supporting its top-and bottom-line results in recent times. We believe escalating demand from chain-restaurant customers and acquisition benefits are two main reasons behind the sound segmental performance.

Moreover, Middleby is all set to launch products in the upcoming quarters, which will support further growth in demand. Over the next 5 years, the company aims to improve its financial performance as well as customer base by undertaking appropriate business measures. The company intends to address sustainability through reduction of food wastage, as well as initiatives to save energy and power. Such efforts would help the company improve its margins and earnings in the quarters ahead.

Few Negative Factors

Middleby's commercial prosperity depends largely on the health of Latin American, European, North American and Asian economies. Sudden recession in any of these economies might adversely affect the company's revenues and margins in the form of lower customer spending or reduced availability of credit facility.

Moreover, higher interest rates or cost prices of energy resources might weigh on the company's top- and bottom-line figures in the future. At the same time, Middleby, operating in a highly competitive diversified machinery industry, faces risks of market share loss.

Stocks to Consider

Middleby currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include Graco Inc. GGG , Graham Corporation GHM and Luxfer Holdings PLC LXFR . All three stocks hold a Zacks Rank #2 (Buy).

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GRACO INC (GGG): Free Stock Analysis Report

GRAHAM CORP (GHM): Free Stock Analysis Report

MIDDLEBY CORP (MIDD): Free Stock Analysis Report

LUXFER HOLDINGS (LXFR): 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 Nasdaq, Inc.


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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