Story updated at 9:45 a.m. to reflect market activity.
Actuant fell -2.4% to $34.72 in morning trading.
The analyst firm also lowered its EPS estimates for the company through 2015. Actuant's earnings look less robust with slower sales development, plant closures, and a weak mix according to Jefferies analysts R. Scott Graham and Bhupender Bohra.
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Separately, TheStreet Ratings team rates ACTUANT CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate ACTUANT CORP (ATU) 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, largely solid financial position with reasonable debt levels by most measures, increase in net income, increase in stock price during the past year and expanding profit margins. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
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 9.1%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The current debt-to-equity ratio, 0.35, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.30, which illustrates the ability to avoid short-term cash problems.
- The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Machinery industry average. The net income increased by 45.6% when compared to the same quarter one year prior, rising from $28.44 million to $41.39 million.
- Compared to where it was 12 months ago, the stock is up, but it has so far lagged the appreciation in the S&P 500. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- ACTUANT CORP's earnings per share declined by 14.3% 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, ACTUANT CORP increased its bottom line by earning $1.98 versus $1.67 in the prior year. This year, the market expects an improvement in earnings ($1.99 versus $1.98).
- You can view the full analysis from the report here: ATU Ratings Report