RBC Bearings (RBC) Displays Bright Prospects, Eyes Growth
On Jan 23, RBC Bearings Inc. ROLL was upgraded to a Zacks Rank #2 (Buy) from a Zacks Rank #3 (Hold). Going by the Zacks model, companies with a Zacks Rank of 2 have chances of delivering better performances than the broader market over the next one to three months.
Over the last six months, RBC Bearings’ shares yielded a return of 21%, outperforming 18% growth recorded by the industry.
The company’s predicted earnings per share (EPS) growth rate for fiscal 2018 (ending March 2018) is currently pegged at 18%, higher than 14.6% projected for the industry.
Why the Upside?
RBC Bearings reported better-than-expected revenues in second-quarter fiscal 2018 (ended Sep 30, 2017), primarily on the back of robust industrial sales. The company believes sturdy original equipment manufacturers’ demand and increased sales of industrial distribution andaftermarket services will continue to boost its top-line results. Moreover, stronger demand from other end-markets, such as mining, marine, energy and semiconductor, are also anticipated to aid near-term the company’s revenue growth trajectory.
The company expects that its margins in the upcoming quarters will be wider on the back of reduced start-up and production run costs of several facilities, production-process improvements and ongoing consolidation programs.
Also, RBC Bearings intends to deleverage its balance sheet, fund new investments and introduce share buyback programs on the back of increased cash flow generation.
The company anticipates to report revenues in the range of $162-$163 million in third-quarter fiscal 2018 (estimating a year-over-year increment of 10-11%).
Other Stocks to Consider
Some other top-ranked stocks in the industry are listed below:
Colfax Corporation CFX currently sports a Zacks Rank #1 (Strong Buy). The company’s earnings per share (EPS) is projected to be up 12.3% in the next three to five years. You can see the complete list of today’s Zacks #1 Rank stocks here.
Applied Industrial Technologies, Inc. AIT holds a Zacks Rank #2. The company’s EPS is predicted to grow by 12% in the next three to five years.
Barnes Group, Inc. B also carries a Zacks Rank #2. The company’s EPS is predicted to grow by 10% in the next three to five years.
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