Bear Of The Day: LCI Industries (LCII)
LCI Industries (LCII) is a Zacks Rank #5 (Strong Sell) as earnings estimates have tracked lower due following a recent earnings miss. The company is in the automotive equipment space and specializes in the components for recreational vechiles and manufactured houses. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.
Description
LCI Industries is a supplier of components to the recreational vehicle and manufactured housing industries as well as adjacent industries including bus, cargo and equestrian trailer, marine and heavy truck. The company's product portfolio includes awnings, suspension enhancement, chassis, doors and laminates, electronics, interior, software and apps, windows and glass, thermoformed bath and kitchen products. LCI Industries, formerly known as formerly Drew Industries Incorporated, is based in Elkhart, Indiana.
Earnings History
When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.
In the case of LCI Industries, I see one beats of the Zacks Consensus Estimate and three misses. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.
The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.
Earnings Estimates
The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For LCII I see annual estimates moving lower of late.
The current fiscal year (2023) consensus number moved lower from $3.08 to $2.91 over the last 60 days.
The next year moved from a gain of $7.35 to $7.04 over the last 60 days.
Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).
It should be noted that a lot of stocks in the Zacks universe are seeing negative earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).
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LCI Industries (LCII) : Free Stock Analysis Report
