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Lincoln Electric Crafts 52-Week High: What's Driving It?

Zacks Equity Research

Shares of Lincoln Electric Holdings, Inc. LECO scaled a 52-week high of $100.68 on Jan 16, eventually closing lower at $99.03. The upswing stemmed from improving end markets.

The company has a market cap of $6.5 billion. Over the last three months, its average volume of shares traded has been approximately 392K. Also, Lincoln Electric surpassed the Zacks Consensus Estimate in three out of the trailing four quarters, with an average positive earnings surprise of 3.65%.

Price Performance

Notably, the stock has gained 8.9% over the past month, higher than the S&P 500’s gain of 3.4%. Lincoln Electric has also outperformed the industry’s rally of 4.3% during the same time frame, with respect to price performance.

What Led to the 52-Week High?

Around 90% of Lincoln Electric’s revenues are exposed to end-sector applications which are, currently on a positive trend. The company’s focus on commercializing innovative products, relatively stable pricing environment and cost-cutting initiatives will also drive growth.

Lincoln Electric Holdings, Inc. Price and Consensus


Lincoln Electric Holdings, Inc. Price and Consensus | Lincoln Electric Holdings, Inc. Quote

Further, Lincoln Electric has increased investment in research and development, and also acquired complementary technologies to boost the strength of its existing product lines. The company has also rolled out new offerings such as automation to supplement growth in the core markets.

With the rationalization of its production and the elimination of unprofitable products, the company has been generating higher operating margins in China. Although the penetration of automated systems is relatively low in the nation, the rising demand for increased efficiency and higher-quality output creates opportunity for growth.

Zacks Rank & Stocks to Consider

Lincoln Electric currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the same sector include Deere & Company DE, Kennametal Inc. KMT and Sandvik AB SDVKY. While Deere sports a Zacks Rank #1 (Strong Buy), Kennametal and Sandvik carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Deere has a long-term earnings growth rate of 8.2%. Its shares have rallied 32.9%, over the past six months.

Kennametal has a long-term earnings growth rate of 8.3%. The company’s shares have been up 32.6% during the same time frame.

Sandvik has a long-term earnings growth rate of 7.5%. Shares of the company have gained 19.8% in six months’ time.

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Lincoln Electric Holdings, Inc. (LECO) : Free Stock Analysis Report
Kennametal Inc. (KMT) : Free Stock Analysis Report
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