Why Should You Dump Apogee (APOG) From Your Portfolio Now?
Apogee Enterprises, Inc. APOG has been disappointing investors, of late. The stock has lost 14.8%, over the past six months. Here’s what might pull down its shares further and why investors should sell the stock.
Estimates Moving South
The Zacks Consensus Estimate for fiscal 2018 and 2019 earnings has been revised downward over the past 30 days, reflecting analysts’ bearish sentiments. Apogee’s earnings estimate has dropped 7.8% to $2.82 for fiscal 2018 and 4.4% to $3.89 for fiscal 2019.
Price Performance
Shares of Apogee have underperformed the industry in a year’s time. The stock has lost 16.6%, while the industry has recorded growth of 5.1%.
Negative Earnings Surprise History
The company missed the Zacks Consensus Estimate in three out of the trailing four quarters. Further, it witnessed an average negative earnings surprise of 6.9% during the same time frame.
Expensive Valuation
Apogee’s trailing 12-month price to earnings (P/E) ratio is 15.2, above the industry's ratio of 9.8. This implies that the stock is overvalued.
Headwinds
Apogee lowered its fiscal 2018 guidance due to lesser-than-expected volume and pricing in the Architectural Glass segment, and higher-than-expected health-care costs. In addition, the trimmed outlook reflects charges which will result from restructuring activities in fourth-quarter fiscal 2018. The company also narrowed its revenue growth guidance to around 20% due to hurricane-related delays. It also trimmed its earnings per share guidance for the fiscal to the $2.58-$2.68 range.
Notably, Apogee’s Architectural Glass segment’s performance will be impacted by heightened competition in both large- and mid-sized projects, in turn putting pressure on top- and bottom-line performance. Further, increase in imports of competitive products from international suppliers might hamper the Architectural Framing Systems segment’s results.
Zacks Rank & Stocks to Consider
Apogee currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the same sector are Deere & Company DE, H&E Equipment Services, Inc. HEES and MSC Industrial Direct Co., Inc. MSM. All three stocks sport a Zacks Rank #1 (Strong 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 34.5%, over the past six months.
H&E Equipment Services has a long-term earnings growth rate of 18.6%. The company’s shares have been up 89.1% during the same time frame.
MSC Industrial has a long-term earnings growth rate of 11.5%. The stock has gained 27.5% in six months’ time.
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Apogee Enterprises, Inc. (APOG) : Free Stock Analysis Report
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