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Raven Industries Down to Strong Sell

Zacks Equity Research

On January 4, Zacks Investment Research downgraded Raven Industries Inc. (RAVN) to a Zacks #5 Rank (Strong Sell).

Why the Downgrade?


Raven Industries has witnessed sharp downward estimate revisions and hit its 52-week low after reporting disappointing results for third-quarter 2012 on November 20. Shares of this industrial manufacturer of products for the agricultural, industrial, construction and military/aerospace markets have dipped to the $20 range since August (post-second quarter results) from the prior $30 range. 


Raven’s third-quarter earnings per share of 30 cents missed the Zacks Consensus Estimate of 34 cents. On a year-over-year basis, earnings dipped 3%.


Raven’s Aerostar will continue to be impacted by a lack of aerostat orders and the Engineered Films segment will also likely face a challenging environment and tough year-over-year comparison. Furthermore, given the company's performance so far in 2012 and expectations of a difficult fourth-quarter, the long-term earnings growth target of 10-15% seems unlikely in the current year. 


The Zacks Consensus Estimate for 2012 decreased 4% to $1.45 per share over the last 60 days. For 2013, the estimate was revised downward over the last 60 days, sinking the Zacks Consensus Estimate by 5% to $1.60 per share.


Other Stocks to Consider


Among the other stocks in the same industry, Carlisle Companies Incorporated ( CSL) holds a Zacks #2 Rank (Buy) and is a favorable option for investors.   

Read the Full Research Report on RAVN

Read the Full Research Report on CSL

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