John Bean (JBT) Hikes Marel Offer, Expects Upbeat '23 Results
John Bean Technologies Corporation JBT raised its offer to acquire all of the outstanding common stock of Marel hf. (Marel) to €3.60 per share. This represents an enterprise value of approximately €3.5 billion. JBT also announced that its fiscal 2023 earnings will surpass previous guidance, driven by robust operational execution. The company introduced guidance for 2024, indicating ongoing margin expansion.
Headquartered in Iceland, Marel is an international food processing company. It manufactures equipment and provides other services to poultry, meat and fish industries. In November 2023, JBT initially proposed a €3.15 per share offer, which was later raised to €3.40 in December.
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 following the completion of the transaction across areas such as procurement, manufacturing and G&A. 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.
Expects 2023 Results Ahead of Guidance
John Bean expects preliminary earnings per share (EPS) for fiscal 2023 to be between $4.05 and $4.15. The company had initially provided a guidance of $3.95-$4.10. Income from continuing operations is expected between $128 million and $131 million, higher than the previous range of $113-$117 million.
Adjusted EBITDA for fiscal 2023 is now estimated between $272 million and $275 million compared with the prior expected range of $265-$271 million. JBT attributes the improved results to strong operational execution on sourcing actions and manufacturing efficiencies, along with a favorable mix from continued growth in recurring revenue.
For the fourth quarter of 2023, JBT expects to report orders in the range of $410 - $420 million and a year-end backlog of $670 - $680 million.
Initiates 2024 Guidance
John Bean expects revenues in the range of $1,750 - $1,780 million in fiscal 2024. Income from continuing operations is expected to range between $154 million and $167 million. Adjusted EBITDA for the fiscal is projected to fall within $295 million to $310 million. The adjusted EBITDA margin is expected to be 17.0-17.5%. JBT expects adjusted EPS to be between $5.05-$5.45 for the fiscal.
Price Performance
John Bean’s shares have declined 2.7% in the past year compared with the industry’s 0.8% fall.
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Zacks Rank & Stocks to Consider
John Bean currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Industrial Products sector are Cintas Corporation CTAS, Eaton Corporation ETN and A. O. Smith Corporation AOS. All of these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Cintas’ fiscal 2024 earnings per share is pegged at $14.57. The estimate projects year-over-year growth of 12.2%. The consensus estimate for 2024 earnings has gone up 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 3.5%. CTAS shares have rallied 37% over the past year.
Eaton has an average trailing four-quarter earnings surprise of 4.2%. The Zacks Consensus Estimate for ETN’s fiscal 2024 earnings is pinned at $10.00 per share, which indicates year-over-year growth of 10.8%. The estimates have moved up 0.3% in the past 60 days. The company’s shares have gained 54% in a year.
The Zacks Consensus Estimate for A. O. Smith’s 2024 earnings is pegged at $4.03 per share, suggesting year-over-year growth of 6.3%. The consensus estimate for 2024 earnings has moved 1% north in the past 60 days and suggests year-over-year growth of 6.3%. The company has a trailing four-quarter average earnings surprise of 14%. AOS shares have gained 35% in a year.
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