Rexnord Corporation (NYSE:RXN) is scheduled to report Q2 earnings results after markets close for trading on October 27, 2020.
The company is expected to report earnings of $0.48/share on revenue of $500.1 million. The consensus earnings per share (EPS) of $0.48/share is based on a poll of 3 analysts and represents a growth in eps of 32.0% over the same quarter last year, when the company reported earnings of $0.36/share.
The revenue forecast of $500.1 million based on a poll of 2 analysts implies a year-over-year (YoY) growth in revenue of 11.3%. Last year the company reported $449.1 million in revenue for the quarter.
|Metric||Expected||Prior Year||YoY Change|
Earnings Call Trends
Management has been great at managing analyst expectations historically. The company has a perfect record over the last 7 tracked quarters of exceeding earnings guidance.
What are your expectations from Rexnord Corporation 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 30, 2020, the stock price reacted by falling −1.3%.
|Report Date||Price Day Prior||Price Next Day||Change %||Result|
|July 28, 2020||$30.61||$30.22||−1.3%||Decline|
|May 12, 2020||$27.10||$25.26||−6.8%||Decline|
|April 28, 2020||$26.30||$28.60||8.7%||Increase|
|January 28, 2020||$31.89||$34.12||7.0%||Increase|
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 −2.85, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.85 implies a 0.2% chance of earnings manipulation.
Fundamentals And Technical Analysis
Rexnord Corporation is currently trading at $31.68/share, up 0.5% for the day. The company is trading at approximately 88.9% of its 52-week high of $35.64/share. The company’s stock price is up 4.8% since the last earnings report and down −0.6% over the previous week.
The company’s 14 Day Relative Price Index (RSI) of 57.54 suggests the company is trading in technically neutral 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 23.80 and a forward P/E multiple of 16.65.
Rexnord Corporation’s current share price also implies a price-to-book (P/B) multiple of 2.83. The following table summarizes some other key fundamental ratios:
|Last Reported Fiscal Period Key||FY2021.Q1|
|Period End Date||June 30, 2020|
|Stock Price (Current)||$31.68|
|P/E Ratio (Fwd)||16.6x|
|Total Debt / Total Capital||25.4%|
|Levered Free Cash Flow||$283.2 million|
|EV / EBITDA||12.4x|
Rexnord Corporation is a mid-cap stock with a market capitalization of $3.822 billion and a total enterprise value of $4.77 billion. The company operates in the Industrials sector and the Machinery industry.
Rexnord Corporation designs, manufactures, and markets process and motion control, and water management products worldwide. It operates in two segments, Process & Motion Control Platform and Water Management Platform. The company offers table top conveying chain and related accessories, metal conveying and engineered woven metals, gearing and gear drives, conveying equipment, industrial chain, and custom assemblies; custom-engineered, application-specific miniature gearboxes, and motion control assemblies and components used in aerospace, defense, medical equipment, robotics, semiconductor, instrumentation, and satellite communications; and shaft management products, including couplings, torque limiters, electromagnetic clutches and brakes, industrial bearings, and shaft locking assemblies. It also provides aerospace components for use in door systems, engine accessories and controls, engine mounts, flight control systems, gearboxes, landing gears, and rotor pitch controls. The company offers valve, distribution and drainage, and site work products; water conservation and finish plumbing products; and commercial electric hand dryers. It sells products through distribution partners, independent sales representatives, plumbing wholesalers, industry-specific distributors, and sales agencies to commercial construction, institutional, infrastructure, and residential construction end market, as well as to original equipment manufacturers and end users. The company offers its products under the Rexnord, Rex, Addax, Euroflex, Falk, FlatTop, Cambridge, Link-Belt, Omega, PSI, Shafer, Stearns, Highfield, Thomas, Centa, Tollok, Zurn, Wilkins, Green Turtle, World Dryer, JUST, Aquaflush, AquaSense, AquaVantage, AquaSpec, EcoVantage, Zurn One, and Zurn One Systems names. Rexnord Corporation was incorporated in 2006 and is headquartered in Milwaukee, Wisconsin.