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Meritor (MTOR) Stock Sinks As Market Gains: What You Should Know

Zacks Equity Research

Meritor (MTOR) closed at $23.90 in the latest trading session, marking a -0.38% move from the prior day. This change lagged the S&P 500's daily gain of 0.74%. Meanwhile, the Dow gained 0.19%, and the Nasdaq, a tech-heavy index, added 1.11%.

Coming into today, shares of the supplier of parts for commercial vehicles and heavy equipment had lost 1.07% in the past month. In that same time, the Auto-Tires-Trucks sector gained 3.6%, while the S&P 500 gained 3.18%.

Wall Street will be looking for positivity from MTOR as it approaches its next earnings report date. This is expected to be July 31, 2019. In that report, analysts expect MTOR to post earnings of $0.95 per share. This would mark year-over-year growth of 6.74%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.17 billion, up 3.63% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.55 per share and revenue of $4.41 billion, which would represent changes of +17.16% and +5.58%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for MTOR. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.25% higher within the past month. MTOR currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that MTOR has a Forward P/E ratio of 6.77 right now. This represents a discount compared to its industry's average Forward P/E of 10.03.

The Automotive - Original Equipment industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 199, which puts it in the bottom 23% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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