Story updated at 9:50 a.m. to reflect market activity.
Rexnord gained 4% to $26.97 in morning trading.
The analyst firm set a price target of $33 for the industrial goods company. Wedbush analysts said Rexnord has operating and financial leverage potential.
Separately, TheStreet Ratings team rates REXNORD CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate REXNORD CORP (RXN) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.5%. Since the same quarter one year prior, revenues slightly increased by 5.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Machinery industry. The net income increased by 67.4% when compared to the same quarter one year prior, rising from $23.90 million to $40.00 million.
- Net operating cash flow has slightly increased to $97.40 million or 2.09% when compared to the same quarter last year. In addition, REXNORD CORP has also modestly surpassed the industry average cash flow growth rate of -4.93%.
- Powered by its strong earnings growth of 62.50% and other important driving factors, this stock has surged by 30.45% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- REXNORD CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, REXNORD CORP reported lower earnings of $0.27 versus $0.55 in the prior year. This year, the market expects an improvement in earnings ($1.65 versus $0.27).
- You can view the full analysis from the report here: RXN Ratings Report