Graco Inc. (NYSE:GGG) is scheduled to report Q3 earnings results after markets close for trading on October 21, 2020.
The company is expected to report earnings of $0.42/share on revenue of $385.2 million. The consensus earnings per share (EPS) of $0.42/share is based on a poll of 10 analysts and represents a decline in eps of −6.4% over the same quarter last year, when the company reported earnings of $0.45/share.
The revenue forecast of $385.2 million based on a poll of 10 analysts implies a year-over-year (YoY) decline in revenue of −3.8%. Last year the company reported $400.6 million in revenue for the quarter.
|Metric||Expected||Prior Year||YoY Change|
Earnings Call Trends
Historically, management has exceeded analyst expectations 3 out of the last 8 tracked quarters, missed 4 quarters, and met expectations 1 quarters.
What are your expectations from Graco Inc. for earnings this quarter? Let us know in the comments!
In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 26, 2020, the stock price reacted by increasing 4.1%.
|Report Date||Price Day Prior||Price Next Day||Change %||Result|
|July 22, 2020||$52.29||$54.46||4.1%||Increase|
|April 22, 2020||$44.56||$44.52||−0.1%||Decline|
|January 27, 2020||$51.98||$55.05||5.9%||Increase|
|October 23, 2019||$46.72||$46.08||−1.4%||Decline|
The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.86, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.86 implies a 0.2% chance of earnings manipulation.
Fundamentals And Technical Analysis
Graco Inc. is currently trading at $65.64/share, up 0.1% for the day. The company is trading at approximately 99.2% of its 52-week high of $66.14/share. The company’s stock price is up 20.5% since the last earnings report and up 1.2% over the previous week.
The company’s 14 Day Relative Price Index (RSI) of 75.92 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.
The current share price implies a price-to-earnings (P/E) multiple of 40.44 and a forward P/E multiple of 40.21.
Graco Inc.’s current share price also implies a price-to-book (P/B) multiple of 10.66. The following table summarizes some other key fundamental ratios:
|Last Reported Fiscal Period Key||FY2020.Q2|
|Period End Date||June 26, 2020|
|Stock Price (Current)||$65.64|
|P/E Ratio (Fwd)||40.2x|
|Total Debt / Total Capital||4.0%|
|Levered Free Cash Flow||$307.1 million|
|EV / EBITDA||25.9x|
Graco Inc. is a large-cap stock with a market capitalization of $10.931 billion and a total enterprise value of $10.95 billion. The company operates in the Industrials sector and the Machinery industry.
Graco Inc. designs, manufactures, and markets systems and equipment used to move, measure, control, dispense, and spray fluid and powder materials worldwide. The company’s Industrial segment offers proportioning systems to spray polyurethane foam and polyurea coatings; equipment that pumps, meters, mixes, and dispenses sealant, adhesive, and composite materials; and gel coat equipment, chop and wet-out systems, resin transfer molding systems, and applicators. It also provides liquid finishing equipment; paint circulating and supply pumps; paint circulating advanced control systems; plural component coating proportioners; spare parts and accessories; and powder finishing products to coat powder finishing on metals under the Gema and SAT brands. The company’s Process segment offers pumps to move and dispense chemicals, oil and natural gas, water, wastewater, petroleum, food, lubricants, and other fluids; pressure valves used in the oil and natural gas industry, other industrial processes, and research facilities; and chemical injection pumping solutions for injection of chemicals into producing oil wells and pipelines. It also supplies pumps, hose reels, meters, valves, and accessories for fast oil change facilities, service garages, fleet service centers, automobile dealerships, auto parts stores, truck builders, and heavy equipment service centers; and systems, components, and accessories for the automatic lubrication of bearings, gears, and generators in industrial and commercial equipment, compressors, turbines, and on- and off-road vehicles. The company’s Contractor segment offers sprayers to apply paint to walls and other structures; and viscous coatings to roofs, as well as markings on roads, parking lots, athletic fields, and floors. It primarily sells its products through distributors, original equipment manufacturers, and home center channels; and directly to end-users. The company was founded in 1926 and is headquartered in Minneapolis, Minnesota.