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Tutor Perini Down to Strong Sell: Should You Dump It Now?

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On Oct 15, 2015, Zacks Investment Research downgraded Tutor Perini CorporationTPC , the building and construction company, to a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

Since the start of 2015, market sentiment has been weak for Tutor Perini as evident from the stock losing over 33% of its value to date. Also, the company's second-quarter 2015 results as well as the outlook for 2015 failed to create optimism among investors.

In the second quarter, the company's earnings plunged 31% year over year to 41 cents and also trailed the Zacks Consensus Estimate of 53 cents. A loss on the Hudson Yards 52-story Tower C concrete project had a negative impact of 17 cents per share on earnings.

For 2015, Tutor Perini trimmed its earnings guidance to a range of $1.90 to $2.10 accounting for the loss from the Hudson Yards Tower C concrete project and delays on the Alaskan Way Viaduct project. The company, however, maintained its revenues outlook in the range of $5-$5.5 billion for the full year.

Tutor Perini's total backlog on Jun 30, 2015, was $7.75 billion, which declined from $7.79 billion reported on Mar 31, 2015. Significant project cancellations or delays will considerably impact revenues.

In addition, Tutor Perini remains exposed to risks arising from strong competition as the construction industry is highly competitive. Significant slowdown in economic conditions will also hurt growth.

Stocks to Consider

Some better-ranked stocks in the sector are Dycom Industries Inc. DY , Chicago Bridge & Iron Company N.V. CBI and Acuity Brands, Inc. AYI . While Dycom Industries carries a Zacks Rank #1 (Strong Buy), Chicago Bridge & Iron Company and Acuity Brands hold a Zacks Rank #2 (Buy).

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Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CHICAGO BRIDGE (CBI): Free Stock Analysis Report

TUTOR PERINI CP (TPC): Free Stock Analysis Report

DYCOM INDS (DY): Free Stock Analysis Report

ACUITY BRANDS (AYI): Free Stock Analysis Report

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Zacks Investment Research

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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