Zacks Investment Research has downgraded Columbus McKinnon CorporationCMCO to a Zacks Rank #5 (Strong Sell) on Jan 21, 2016. Going by the Zacks model, companies holding a Zacks Rank #5 have strong chances of underperforming the broader market in the near term.
Why the Downgrade?
Market sentiments have been against Columbus McKinnon Corporation since the beginning of fiscal 2016 (Apr 2015-Mar 2016), as evident from a negative share price return of 47%. The company's financial performances have been disappointing in the first two quarters of fiscal 2016 as well as in the last four quarters, with a negative average earnings surprise of 9.52%.
In the last reported quarter, Columbus McKinnon Corporation's earnings of 40 cents per share fell short of the Zacks Consensus Estimate of 44 cents. Net sales declined 0.6% year over year due primarily to negative impact of foreign currency movements, partially offset by gains from acquisitions and organic growth.
For second-half fiscal 2016, Columbus McKinnon Corporation anticipates weakness in the oil and gas industry, soft demand from heavy OEM manufacturers, forex losses and limitations in the Chinese economy to act as headwinds.
Disappointment over weak results and outlook triggered downward revision in earnings estimates for Columbus McKinnon Corporation. Over the last 60 days, the Zacks Consensus Estimate for the stock has decreased 1.8% to $1.65 per share for fiscal 2016 and 5.3% to $1.98 per share for fiscal 2017. Also, the company has an Earnings ESP of -0.61% for fiscal 2016 and -1.01% for fiscal 2017.
Stocks to Consider
Columbus McKinnon Corporation currently has a $286-million market capitalization. Better-ranked stocks in the sector include Codexis, Inc. CDXS , Gorman-Rupp Co. GRC , and CUI Global, Inc. CUI . While Codexis and Gorman-Rupp sport a Zacks Rank #1 (Strong Buy), CUI Global carries a Zacks Rank #2 (Buy).