Zacks Investment Research downgraded Altra Industrial Motion Corp. AIMC to a Zacks Rank #4 (Sell) from a Zacks Rank #3 (Hold) on Jan 7, 2016. Going by the Zacks model, stocks carrying a Zacks Rank #4 are likely to underperform the broader market over the next few quarters.
Why on Sell?
For 2015, Altra Industrial Motion has lowered its sales and earnings per share forecasts to $745–$755 million and $1.60–$1.68 from their respective prior projections of $760–$780 million and $1.60–$1.75. In recent times, factors like persistent difficult conditions in energy, agriculture, and mining & metals end markets, adverse foreign currency translations and weak performance of Couplings Clutches & Brakes as well as Gearing segments have been weighing on the company’s top- and bottom-line figures.
Moreover, the company’s mounting debt burden and cost of goods, if not checked immediately, would prove detrimental to its future profitability. Also, Altra Industrial Motion faces a stiffly competitive environment due to its wide diversity of products as well as vastness of the markets it serves. Difficulties or delays in research & development or production & services, apart from failure of new products and technologies in the market, may hurt the company's competitive position in the near future.
Analysts remain cautious on the stock, which is clearly evident from the downward revision witnessed in the Zacks Consensus Estimate over the past 90 days. As a result, the stock fell roughly 1% to $1.65 per share for 2015 and 3.9% to $1.74 for 2016.
Stocks to Consider
Better-ranked stocks in the industry include DXP Enterprises, Inc. DXPE, Gorman-Rupp Co. GRC and Graham Corporation GHM. While DXP Enterprises sports a Zacks Rank #1 (Strong Buy), both Gorman-Rupp and Graham Corporation carry a Zacks Rank #2 (Buy).
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 >>
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
Be the first to comment