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John Bean (JBT) Stock Dips 9% in a Year: Will It Bounce Back?
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John Bean Technologies Corporation (JBT - Free Report) shares have lost 8.8% in a year against the industry’s growth of 25.2%. This mainly reflects the impacts of material inflation, and supply-chain and logistic disruptions that the company has been facing for the past few quarters.
Image Source: Zacks Investment Research
High Costs Act as Woes
John Bean has been witnessing material inflation, supply-chain and logistics disruptions, and higher labor costs. The shortages of critical raw materials (particularly electronic components) and labor have impeded its production and deliveries. Challenges associated with supply-chain disruptions, high inflation and labor availability will continue to weigh on its margins. It also increased the overall costs of running the business.
The company has reported an increase in selling, general and administrative expenses due to higher relative expenses from the recently acquired companies, including higher amortization costs of acquired intangible assets. This will continue to impact its operating margin.
The company is initiating additional restructuring actions in 2024 to optimize its global cost structure. It expects the total costs of $1 million for its restructuring program in 2024. These factors are expected to dent JBT’s margins in 2024.
John Bean has a market capitalization of around $3 billion. It currently carries a Zacks Rank #3 (Hold). Let us discuss the factors that indicate that the stock might stage a comeback.
Focus on Growth: In 2022, JBT introduced its Elevate 2.0 strategy, which is expected to drive continued growth and margin expansion for the company by capitalizing on the growth trends in the food and beverage processing industry. The industry is poised for continued growth, supported by favorable underlying secular and cyclical trends.
John Bean plans to continue introducing products that support customers' needs for yield, capacity, automation and sustainability. The company will also look for strategic acquisitions that provide meaningful synergies with its existing products and solutions.
Portfolio Optimization Actions: The company sold its AeroTech segment to Oshkosh Corporation on Aug 1, 2023. AeroTech's divestment fulfilled John Bean's aim of becoming a pure-play provider of food and beverage solutions.
The FoodTech franchise operates in highly robust markets. It has an impressive growth outlook and expanding margin profile. It also generates a solid free cash flow.
Solid Q1 Performance: John Bean reported first-quarter 2024 adjusted earnings from continuing operations of 85 cents per share, up 39% from the year-ago quarter, reflecting cost savings from its supply-chain initiatives and restructuring program. The figure beat the Zacks Consensus Estimate of earnings of 82 cents per share.
Revenues of $392 million were up 1% from the year-ago quarter. Organic growth improved 1% year over year.
Upbeat 2024 Guidance: JBT expects revenues between $1.735 billion and $1.765 billion for 2024. The mid-point of the range indicates year-over-year growth of 5%. John Bean expects organic growth of 4-6%.
Income from continuing operations is likely to be $142-$154 million. Adjusted EBITDA is forecast at $295-$310 million, indicating year-over-year growth of 11% at the mid-point. The EBITDA margin is likely to be between 17% and 17.5%. JBT reported an adjusted EBITDA margin of 16.4% in 2023.
John Bean expects adjusted earnings per share between $5.05 and $5.45 for 2024. The mid-point of the range suggests 28% year-over-year growth. Margins are expected to sequentially improve through the quarters, reflecting improving market conditions and gains from strategic sourcing actions.
Pending Combination With Marel: On Apr 4, 2024, John Bean and Marel executed a definitive transaction agreement related to JBT’s previously announced intention to make a voluntary takeover offer for the issued and outstanding shares of Marel. Both parties completed confirmatory due diligence. Subject to regulatory clearance procedures, John Bean expects to close the transaction by the end of 2024.
The proposed merger will unite two renowned companies with complementary product portfolios, well-known brands and advanced technology. The combined company, which is expected to be named JBT Marel Corporation, is poised to become a leading and diversified global food and beverage technology solutions provider. Anticipated benefits of the merger include significant cost synergies exceeding $125 million within three years.
JBT Marel is also expected to benefit from additional revenue synergies, given attractive cross-selling, go-to-market effectiveness, scaled innovation and enhanced global customer care capabilities.
The Zacks Consensus Estimate for Intellicheck’s 2024 earnings is pegged at 2 cents per share. The consensus estimate for 2024 earnings has been unchanged in the past 60 days. The company has a trailing four-quarter average earnings surprise of 28.9%. IDN shares have gained 13.7% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 8.2%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.62 per share, which indicates year-over-year growth of 9.9%. Estimates have moved north by 2% in the past 60 days. The company’s shares have gained 60.1% in the past year.
The Zacks Consensus Estimate for ACCO Brands’ 2024 earnings is pegged at $1.07 per share. The consensus estimate for 2024 earnings has been unchanged in the past 60 days. The company has a trailing four-quarter average earnings surprise of 25.9%. ACCO shares have gained 1.5% in the past year.
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John Bean (JBT) Stock Dips 9% in a Year: Will It Bounce Back?
John Bean Technologies Corporation (JBT - Free Report) shares have lost 8.8% in a year against the industry’s growth of 25.2%. This mainly reflects the impacts of material inflation, and supply-chain and logistic disruptions that the company has been facing for the past few quarters.
Image Source: Zacks Investment Research
High Costs Act as Woes
John Bean has been witnessing material inflation, supply-chain and logistics disruptions, and higher labor costs. The shortages of critical raw materials (particularly electronic components) and labor have impeded its production and deliveries. Challenges associated with supply-chain disruptions, high inflation and labor availability will continue to weigh on its margins. It also increased the overall costs of running the business.
The company has reported an increase in selling, general and administrative expenses due to higher relative expenses from the recently acquired companies, including higher amortization costs of acquired intangible assets. This will continue to impact its operating margin.
The company is initiating additional restructuring actions in 2024 to optimize its global cost structure. It expects the total costs of $1 million for its restructuring program in 2024. These factors are expected to dent JBT’s margins in 2024.
John Bean has a market capitalization of around $3 billion. It currently carries a Zacks Rank #3 (Hold). Let us discuss the factors that indicate that the stock might stage a comeback.
Focus on Growth: In 2022, JBT introduced its Elevate 2.0 strategy, which is expected to drive continued growth and margin expansion for the company by capitalizing on the growth trends in the food and beverage processing industry. The industry is poised for continued growth, supported by favorable underlying secular and cyclical trends.
John Bean plans to continue introducing products that support customers' needs for yield, capacity, automation and sustainability. The company will also look for strategic acquisitions that provide meaningful synergies with its existing products and solutions.
Portfolio Optimization Actions: The company sold its AeroTech segment to Oshkosh Corporation on Aug 1, 2023. AeroTech's divestment fulfilled John Bean's aim of becoming a pure-play provider of food and beverage solutions.
The FoodTech franchise operates in highly robust markets. It has an impressive growth outlook and expanding margin profile. It also generates a solid free cash flow.
Solid Q1 Performance: John Bean reported first-quarter 2024 adjusted earnings from continuing operations of 85 cents per share, up 39% from the year-ago quarter, reflecting cost savings from its supply-chain initiatives and restructuring program. The figure beat the Zacks Consensus Estimate of earnings of 82 cents per share.
Revenues of $392 million were up 1% from the year-ago quarter. Organic growth improved 1% year over year.
Upbeat 2024 Guidance: JBT expects revenues between $1.735 billion and $1.765 billion for 2024. The mid-point of the range indicates year-over-year growth of 5%. John Bean expects organic growth of 4-6%.
Income from continuing operations is likely to be $142-$154 million. Adjusted EBITDA is forecast at $295-$310 million, indicating year-over-year growth of 11% at the mid-point. The EBITDA margin is likely to be between 17% and 17.5%. JBT reported an adjusted EBITDA margin of 16.4% in 2023.
John Bean expects adjusted earnings per share between $5.05 and $5.45 for 2024. The mid-point of the range suggests 28% year-over-year growth. Margins are expected to sequentially improve through the quarters, reflecting improving market conditions and gains from strategic sourcing actions.
Pending Combination With Marel: On Apr 4, 2024, John Bean and Marel executed a definitive transaction agreement related to JBT’s previously announced intention to make a voluntary takeover offer for the issued and outstanding shares of Marel. Both parties completed confirmatory due diligence. Subject to regulatory clearance procedures, John Bean expects to close the transaction by the end of 2024.
The proposed merger will unite two renowned companies with complementary product portfolios, well-known brands and advanced technology. The combined company, which is expected to be named JBT Marel Corporation, is poised to become a leading and diversified global food and beverage technology solutions provider. Anticipated benefits of the merger include significant cost synergies exceeding $125 million within three years.
JBT Marel is also expected to benefit from additional revenue synergies, given attractive cross-selling, go-to-market effectiveness, scaled innovation and enhanced global customer care capabilities.
Stocks to Consider
Some better-ranked stocks from the Industrial Products sector are Intellicheck, Inc. (IDN - Free Report) , Applied Industrial Technologies (AIT - Free Report) and ACCO Brands Corporation (ACCO - Free Report) . IDN currently sports a Zacks Rank #1 (Strong Buy), and AIT and ACCO carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Intellicheck’s 2024 earnings is pegged at 2 cents per share. The consensus estimate for 2024 earnings has been unchanged in the past 60 days. The company has a trailing four-quarter average earnings surprise of 28.9%. IDN shares have gained 13.7% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 8.2%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.62 per share, which indicates year-over-year growth of 9.9%. Estimates have moved north by 2% in the past 60 days. The company’s shares have gained 60.1% in the past year.
The Zacks Consensus Estimate for ACCO Brands’ 2024 earnings is pegged at $1.07 per share. The consensus estimate for 2024 earnings has been unchanged in the past 60 days. The company has a trailing four-quarter average earnings surprise of 25.9%. ACCO shares have gained 1.5% in the past year.