Nordon Scales Up to a New 52-Week High - Analyst Blog

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Shares of Nordson Corporation ( NDSN ) touched a new 52-week high of $82.24 during its trading session on May 23. The new 52-week high improved upon the last one of $77.41 hit on May 14.

Nordson closed the session on May 23 at $81.86, reflecting a solid year-to-date return of 13.1%. The trading volume for the session was 0.82 million. Positive revisions in earnings estimates for fiscal 2014 as well as an expected 13.0% earnings growth rate for the next five years indicate further upward potential for this machinery company.

Growth Drivers

Nordson reported an impressive result for fiscal second-quarter 2014 (ended Apr 30, 2014). Adjusted earnings came in at 97 cents per share, up 15.5% year over year and also surpassed the Zacks Consensus Estimate of 90 cents by 7.8%.

Revenues generated rose 9.3% to $417.5 million driven by organic volume growth of 4.0%, acquisitions contribution of 5.0% and 1.0% gain from currency translation. Backlog was $247.0 million, up 25% from the year-ago quarter, while orders for the 12-week period ended May 18, 2014 increased 9% year over year, on a constant currency basis. Operating profits grew 12.9% year over year, while operating margin gained 70 basis points (bps) and stood at 22.2%.

For fiscal third-quarter 2014, Nordson anticipates total revenues to grow in the 9−13% range; comprising 3−7% organic revenues growth, 5% contribution from acquisitions and 1% gain from foreign currency translation. Operating margin is expected to be roughly 24%. Non-adjusted earnings are expected to lie in the range of $1.06−$1.16 per share.

Stellar quarter-performance and a robust outlook have made us optimistic about Nordson's performance in the coming quarters. The company has an Earnings ESP of +1.80% for fiscal third-quarter 2014, +2.45% for fiscal 2014 and +2.38% for fiscal 2015.

Estimate Revisions Show Potency

Over the last seven days, the Zacks Consensus Estimate for Nordson has inched up 0.5% to $3.68 for fiscal 2014 and by 0.7% to $4.21 for fiscal 2015. The Zacks Consensus Estimate depicts year-over-year growth rate of 8.9% for fiscal 2014 and 14.3% for fiscal 2015.

Nordson Corporation has a market capitalization of $5.2 billion and carries a Zacks Rank #2 (Buy). Some better-ranked stocks in the industry include Gorman-Rupp Co. ( GRC ), Illinois Tool Works Inc. ( ITW ) and Blount International Inc. ( BLT ). While Gorman-Rupp sports a Zacks Rank #1 (Strong Buy), both Illinois Tool Works and Blount International have a Zacks Rank #2.

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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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