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Manitowoc (MTW) Rallies 87% in a Year: More Room to Run?
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The Manitowoc Company (MTW - Free Report) has rallied 87% in a year, faring way better than the industry’s 21% growth. The Industrial Products sector has risen 15.6%, while the Zacks S&P 500 composite has moved up 27% in the same time frame.
MTW has a market capitalization of $583 million. The average volume of shares traded in the last three months was 298k.
Manitowoc currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Solid Order Levels Bode Well
The company’s orders in the third quarter of 2023 were $531.2 million, a 12.5% increase from the year-ago quarter. The backlog was $1,028 million as of Sep 30, 2023, up 9% from the year-ago quarter’s backlog. Backed by the solid performance in the first three quarters of the year, Manitowoc expects revenues to be $2.175-$2.225 billion for 2023, up from the previously stated $2.1-$2.2 billion. Adjusted EBITDA is anticipated to be between $160 million and $180 million, up from the $150-$180 million mentioned earlier. The midpoint of the guidance indicates year-over-year growth of 19%.
The Zacks Consensus Estimate for the company’s fiscal 2023 earnings per share is currently pegged at $1.62, which suggests year-over-year growth of 53%.
Upbeat Estimate Projections
The consensus estimate for the company’s fiscal 2023 earnings has moved up 1% over the past 30 days. The same for 2024 has gone up 6%.
Demand to Remain Strong
In North America, demand from residential and non-residential construction is driving demand for Manitowoc’s equipment. Due to the U.S. Infrastructure Investment and Jobs Act, the rising investment in roads, bridges, airports and waterways represents a massive opportunity. The company expects demand in the Middle East to be robust in the upcoming quarters. Qatar and Kuwait are also showing signs of growth. This bodes well for Manitowoc. Further, the need to replace the aging crane fleet will support the demand for the company’s equipment.
Focus on Aftermarket Sales, Innovation to Aid Growth
To achieve sustainable growth in both sales and earnings, Manitowoc is now placing greater emphasis on growing non-new machine sales (aftermarket parts, services, rentals, used cranes and digital solutions). Growing this part of the business will provide it with more annuity-like revenue streams, which will help lessen the impact of the crane market cyclicality. This business also carries higher margin rates than new crane sales.
MTW continues to evaluate acquisition opportunities to accelerate product development programs in its all-terrain product line. Manitowoc’s innovation pipeline remains robust. Focus on innovation will continue to aid it in leading the industry by providing differentiated products of value to its customers.
Pricing Actions to Counter Costs
The company is facing higher steel, logistics and transportation costs (both ocean and land freight), which are expected to continue. Manitowoc’s pricing actions and efforts to cut down costs will help negate the impact of inflated costs on its margins.
Stocks to Consider
Some better-ranked stocks from the Industrial Products sector are Resideo Technologies, Inc. (REZI - Free Report) , Applied Industrial Technologies (AIT - Free Report) and A. O. Smith Corporation (AOS - Free Report) .
The Zacks Consensus Estimate for Resideo Technologies’ 2023 earnings per share is pegged at $1.48. The consensus estimate for 2023 earnings has been unchanged in the past 60 days. The company has a trailing four-quarter average earnings surprise of 5.7%. REZI shares have rallied 15.6% year to date.
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have moved up 4% in the past 60 days. The company’s shares have gained 40% year to date.
The Zacks Consensus Estimate for A. O. Smith’s 2023 earnings is pegged at $3.77 per share. The consensus estimate for 2023 earnings has moved 5% north in the past 60 days and suggests year-over-year growth of 20.1%. The company has a trailing four-quarter average earnings surprise of 14%. AOS shares have gained 45.6% year to date.
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Manitowoc (MTW) Rallies 87% in a Year: More Room to Run?
The Manitowoc Company (MTW - Free Report) has rallied 87% in a year, faring way better than the industry’s 21% growth. The Industrial Products sector has risen 15.6%, while the Zacks S&P 500 composite has moved up 27% in the same time frame.
MTW has a market capitalization of $583 million. The average volume of shares traded in the last three months was 298k.
Manitowoc currently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
Solid Order Levels Bode Well
The company’s orders in the third quarter of 2023 were $531.2 million, a 12.5% increase from the year-ago quarter. The backlog was $1,028 million as of Sep 30, 2023, up 9% from the year-ago quarter’s backlog. Backed by the solid performance in the first three quarters of the year, Manitowoc expects revenues to be $2.175-$2.225 billion for 2023, up from the previously stated $2.1-$2.2 billion. Adjusted EBITDA is anticipated to be between $160 million and $180 million, up from the $150-$180 million mentioned earlier. The midpoint of the guidance indicates year-over-year growth of 19%.
The Zacks Consensus Estimate for the company’s fiscal 2023 earnings per share is currently pegged at $1.62, which suggests year-over-year growth of 53%.
Upbeat Estimate Projections
The consensus estimate for the company’s fiscal 2023 earnings has moved up 1% over the past 30 days. The same for 2024 has gone up 6%.
Demand to Remain Strong
In North America, demand from residential and non-residential construction is driving demand for Manitowoc’s equipment. Due to the U.S. Infrastructure Investment and Jobs Act, the rising investment in roads, bridges, airports and waterways represents a massive opportunity. The company expects demand in the Middle East to be robust in the upcoming quarters. Qatar and Kuwait are also showing signs of growth. This bodes well for Manitowoc. Further, the need to replace the aging crane fleet will support the demand for the company’s equipment.
Focus on Aftermarket Sales, Innovation to Aid Growth
To achieve sustainable growth in both sales and earnings, Manitowoc is now placing greater emphasis on growing non-new machine sales (aftermarket parts, services, rentals, used cranes and digital solutions). Growing this part of the business will provide it with more annuity-like revenue streams, which will help lessen the impact of the crane market cyclicality. This business also carries higher margin rates than new crane sales.
MTW continues to evaluate acquisition opportunities to accelerate product development programs in its all-terrain product line. Manitowoc’s innovation pipeline remains robust. Focus on innovation will continue to aid it in leading the industry by providing differentiated products of value to its customers.
Pricing Actions to Counter Costs
The company is facing higher steel, logistics and transportation costs (both ocean and land freight), which are expected to continue. Manitowoc’s pricing actions and efforts to cut down costs will help negate the impact of inflated costs on its margins.
Stocks to Consider
Some better-ranked stocks from the Industrial Products sector are Resideo Technologies, Inc. (REZI - Free Report) , Applied Industrial Technologies (AIT - Free Report) and A. O. Smith Corporation (AOS - Free Report) .
REZI currently sports a Zacks Rank #1 (Strong Buy), and AIT and AOS carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Resideo Technologies’ 2023 earnings per share is pegged at $1.48. The consensus estimate for 2023 earnings has been unchanged in the past 60 days. The company has a trailing four-quarter average earnings surprise of 5.7%. REZI shares have rallied 15.6% year to date.
Applied Industrial has an average trailing four-quarter earnings surprise of 15%. The Zacks Consensus Estimate for AIT’s 2023 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have moved up 4% in the past 60 days. The company’s shares have gained 40% year to date.
The Zacks Consensus Estimate for A. O. Smith’s 2023 earnings is pegged at $3.77 per share. The consensus estimate for 2023 earnings has moved 5% north in the past 60 days and suggests year-over-year growth of 20.1%. The company has a trailing four-quarter average earnings surprise of 14%. AOS shares have gained 45.6% year to date.