We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Investors Should Avoid Investing in Graco Stock Now
Read MoreHide Full Article
Graco Inc.’s (GGG - Free Report) financial stability is challenged by weakness in the Industrial and Process segments. Elevated costs are putting a strain on the bottom line.
Headquartered in Minneapolis, MN, Graco engages in designing, manufacturing and marketing equipment and systems used to measure, move, control, spray and dispense fluid as well as powder materials. The company offers equipment solutions for tough-to-handle materials with high viscosities, abrasive or corrosive properties and multiple component materials that demand precise ratio control.
GGG currently carries a Zacks Rank #4 (Sell). In the past year, the stock has gained 11.2% compared with the industry’s 32.8% growth.
Image Source: Zacks Investment Research
Business Weakness: Graco is experiencing softness in the Industrial segment, due to decline in finishing system sales in the Asia-Pacific region. A decrease in demand for the company’s semiconductor, industrial lubrication and process transfer equipment products owing to a weakness in the industrial sector is hampering the Process segment’s performance. The company expects organic net sales to decline in low single-digit on a constant-currency basis for 2024.
High Costs: Rising costs pose a threat to the company’s bottom line. In 2023, Graco’s selling, marketing and distribution costs increased 3.9% from the year-ago period. General and administrative expenses jumped 11.5% in the same period. Operating expenses increased 6% in 2023 due to incremental share-based compensation and increased spending on product development. The trend continued in the first nine months of 2024, with selling, marketing and distribution costs, and general and administrative expenses increasing 3.4% and 6.3%, respectively, year over year. The metrics, as a percentage of net sales, increased 90 basis points each, year over year.
Forex Woes: Graco has operations in multiple nations. International expansion exposes it to risks arising from unfavorable movement in foreign currencies, geopolitical issues and other headwinds. In the first nine months of 2024, foreign currency translation had a negative impact of 1% on the Asia Pacific region’s revenues.
GHM delivered a trailing four-quarter average earnings surprise of 101.9%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 earnings has increased 8.4%.
Crane Company (CR - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 7.6%.
In the past 60 days, the consensus estimate for CR’s 2024 earnings has increased 1.2%.
Kadant Inc. (KAI - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 17.2%.
The Zacks Consensus Estimate for KAI’s 2024 earnings has increased 1.8% in the past 60 days.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why Investors Should Avoid Investing in Graco Stock Now
Graco Inc.’s (GGG - Free Report) financial stability is challenged by weakness in the Industrial and Process segments. Elevated costs are putting a strain on the bottom line.
Headquartered in Minneapolis, MN, Graco engages in designing, manufacturing and marketing equipment and systems used to measure, move, control, spray and dispense fluid as well as powder materials. The company offers equipment solutions for tough-to-handle materials with high viscosities, abrasive or corrosive properties and multiple component materials that demand precise ratio control.
GGG currently carries a Zacks Rank #4 (Sell). In the past year, the stock has gained 11.2% compared with the industry’s 32.8% growth.
Image Source: Zacks Investment Research
Business Weakness: Graco is experiencing softness in the Industrial segment, due to decline in finishing system sales in the Asia-Pacific region. A decrease in demand for the company’s semiconductor, industrial lubrication and process transfer equipment products owing to a weakness in the industrial sector is hampering the Process segment’s performance. The company expects organic net sales to decline in low single-digit on a constant-currency basis for 2024.
High Costs: Rising costs pose a threat to the company’s bottom line. In 2023, Graco’s selling, marketing and distribution costs increased 3.9% from the year-ago period. General and administrative expenses jumped 11.5% in the same period. Operating expenses increased 6% in 2023 due to incremental share-based compensation and increased spending on product development. The trend continued in the first nine months of 2024, with selling, marketing and distribution costs, and general and administrative expenses increasing 3.4% and 6.3%, respectively, year over year. The metrics, as a percentage of net sales, increased 90 basis points each, year over year.
Forex Woes: Graco has operations in multiple nations. International expansion exposes it to risks arising from unfavorable movement in foreign currencies, geopolitical issues and other headwinds. In the first nine months of 2024, foreign currency translation had a negative impact of 1% on the Asia Pacific region’s revenues.
Stocks to Consider
Some better-ranked companies are discussed below.
Graham Corporation (GHM - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GHM delivered a trailing four-quarter average earnings surprise of 101.9%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 earnings has increased 8.4%.
Crane Company (CR - Free Report) presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 7.6%.
In the past 60 days, the consensus estimate for CR’s 2024 earnings has increased 1.2%.
Kadant Inc. (KAI - Free Report) presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 17.2%.
The Zacks Consensus Estimate for KAI’s 2024 earnings has increased 1.8% in the past 60 days.