ITT Stands on Solid Footing Across Markets Amid High Costs
On Jan 17, we issued an updated research report on ITT Inc. ITT.
In the past month, this Zacks Rank #3 (Hold) stock has returned 3.7% compared with the industry’s rise of 2.8%.
Existing Scenario
ITT perceives that increased orders from the chemical and general industrial businesses, sturdier demand for its specialized connectors and growth in its worldwide automotive friction orders will likely continue to drive its revenue growth in the quarters ahead. The company currently expects revenues to grow 6-7% in 2018. Notably, organic top-line improvement view for 2018 is revised from 3-5% to 4-5%.
Also, the company believes that commercial excellence, elevated productivity and lower tax expenses will consistently boost its profitability in the upcoming quarters. Notably, the company has revised its earnings view for 2018 from $3.05-$3.15 to $3.13-$3.15 per share range. The mid-point of the revised earnings view is at $3.14, up 21% from the prior-year tally.
Additionally, the company noted that investments made in upgrading its ITT Smart Pad has largely aided in accelerating board-testing activities among multiple end users. Also, the recent investment on enhancing the company’s production capabilities and technology of rotorcraft is likely to generate benefits.
However, the company’s cost of sales increased 5.6% in the first nine months of 2018 on a year-over-year basis. It noted that material cost inflation (on account of tariffs) and higher incentive expenses are escalating its aggregate costs. We believe that rising costs, if unchecked, might weigh on ITT's bottom-line performances going forward.
Key Picks
Some better-ranked stocks in the same space are Hitachi Ltd. HTHIY, Carlisle Companies Incorporated CSL and HC2 Holdings, Inc. HCHC. While Hitachi sports a Zacks Rank #1 (Strong Buy), Carlisle and HC2 Holdings carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Hitachi delivered average earnings surprise of 55.51% in the trailing four reported quarters.
Carlisle pulled off average positive earnings surprise of 11.90% in the previous four reported quarters.
HC2 Holdings’ earnings surprise in the last reported quarter was 111.90%.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Hitachi Ltd. (HTHIY) : Free Stock Analysis Report
HC2 Holdings, Inc. (HCHC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
