L.B. Foster (FSTR) Rallies 86% YTD: Will the Momentum Continue?
L.B. Foster Company FSTR shares have rallied 86.1% year to date. The rally has resulted in the stock outperforming its industry’s rise of 32% over the same time frame. The company also topped the S&P 500’s roughly 18.6% rise over the same period.
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Let’s look at the factors driving this Zacks Rank #2 (Buy) stock.
What’s Going in L.B. Foster’s Favor?
FSTR's second quarter results exceeded expectations, with earnings per share reaching 32 cents, up from the previous year's 18 cents and surpassing the Zacks Consensus Estimate of 28 cents. The company reported healthy revenue growth, with a 12.5% year-over-year increase to $148 million, exceeding the consensus estimate of $140.7 million.
Also, new orders for the quarter reached an impressive $183.7 million, reflecting a substantial 30% year-over-year increase. This exceptional performance can be attributed to heightened demand, higher prices, a favorable product mix, and ongoing transformation initiatives. Consequently, FSTR has revised its 2023 financial outlook, projecting adjusted EBITDA from $28 million to $32 million, up from the initial guidance of $27 million to $31 million.
In the Rail, Technologies, and Services segment, sales saw a 12% year-over-year increase, reaching $91.6 million in the second quarter. Meanwhile, the Precast Concrete Products Segment reported sales of $33.9 million, indicating a 43.4% year-over-year increase. This growth included 12.8% organic growth and a 30.6% contribution from the acquisition of VanHooseCo Precast, LLC.
For full-year 2023, the Zacks Consensus Estimate for earnings is pegged at 53 cents per share, suggesting a staggering year-over-year growth of 112.5%. For 2024, earnings are anticipated to experience an impressive 117% growth.
Also, FSTR has consistently surpassed the Zacks Consensus Estimate in each of the past four quarters, with a remarkable trailing four-quarter average earnings surprise of 134.5%.
L.B. Foster Company Price and Consensus
L.B. Foster Company price-consensus-chart | L.B. Foster Company Quote
Zacks Rank & Other Key Picks
Some other top-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, Akzo Nobel N.V. AKZOY and Hawkins, Inc. HWKN, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.48, indicating a year-over-year growth of 205%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 85.1% in the past year.
The consensus estimate for Akzo Nobel’s current-year earnings is pegged at $1.44, indicating year-over-year growth of 67.4%. In the past 60 days, AKZOY’s current-year earnings estimate has been revised upward by 2.9%. The company’s shares have rallied 24.5% in the past year.
The consensus estimate for Hawkins’ current-year earnings is pegged at $3.40, indicating year-over-year growth of 18.9%. HWKN beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have rallied 59.5% in the past year.
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