Nordson Down to Strong Sell


Zacks Investment Research downgraded Nordson Corporation (NDSN) to a Zacks Rank #5 (Strong sell) on Jun 28, 2013.

Why the Downgrade?

Shares of Nordson Corporation have dipped roughly 3.7% since the company reported its second quarter of fiscal 2013 (ended Apr 30) results on May 23. The results were lackluster as earnings per share of 84 cents were in line with the year-ago quarter and the Zacks Consensus Estimate.

Revenue grew roughly 21% year over year while backlog exiting the quarter stood at $200 million, up just 3% compared with the year-ago period. Orders for the 12-week ended May 19, 2013 were down 2% over the same period a year-ago.

Talking of expenses and margins, cost of sales in the quarter rose 31.6% and represented 43.2% of total revenue; up from 39.8% in the year-ago quarter while operating margin declined from 24.4% to 21.5% in the quarter.

For fiscal 2013, management of Nordson anticipates organic revenue growth to range within 0%-4% while currency translation is predicted to have a negative 1% impact on total revenue growth.

In the last 60 days, the Zacks Consensus Estimate for Nordson has gone down by 5.0% to $3.62 for 2013 and has declined 9.3% to $4.09 for 2014. Also, we have an Earnings ESP (Read: Zacks Earnings ESP: A Better Method) of -0.6% for fiscal 2013.

Other Stocks to Consider

Nordson Corporation is a $4.5 billion company, operating in the diversified machinery industry. Other stocks to watch out for in the industry are Kawasaki Heavy Industries Ltd. (KWHIY) and Sun Hydraulics Corp. (SNHY), each with a Zacks Rank #1 (Strong Buy) while Applied Industrial Technologies, Inc. (AIT) has a Zacks Rank #2 (Buy).

Read the Full Research Report on AIT

Read the Full Research Report on NDSN

Read the Full Research Report on SNHY

Read the Full Research Report on KWHIY

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