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

Zacks Equity Research
Activision Blizzard (ATVI) closed the most recent trading day at $45.14, moving -1.27% from the previous trading session.

Meritor (MTOR) closed at $20.83 in the latest trading session, marking a -0.19% move from the prior day. This move lagged the S&P 500's daily gain of 0.5%. At the same time, the Dow added 0.54%, and the tech-heavy Nasdaq gained 0.76%.

Coming into today, shares of the supplier of parts for commercial vehicles and heavy equipment had lost 0.86% in the past month. In that same time, the Auto-Tires-Trucks sector lost 1.19%, while the S&P 500 gained 2.53%.

Investors will be hoping for strength from MTOR as it approaches its next earnings release. The company is expected to report EPS of $0.87, up 16% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.10 billion, up 3.5% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $3.36 per share and revenue of $4.32 billion, which would represent changes of +10.89% and +3.33%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for MTOR. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. MTOR is currently a Zacks Rank #2 (Buy).

In terms of valuation, MTOR is currently trading at a Forward P/E ratio of 6.22. Its industry sports an average Forward P/E of 9.03, so we one might conclude that MTOR is trading at a discount comparatively.

The Automotive - Original Equipment industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 180, putting it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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