FBHS Upgraded to Strong Buy - Analyst Blog
January 21 2013 - 8:30AM
Zacks
On Jan 19, Zacks Investment
Research upgraded Fortune Brands Home & Security,
Inc. (FBHS) to a Zacks Rank #1 (Strong Buy).
Why the
Upgrade?
Fortune Brands H&S has been
witnessing rising earnings estimates driven by strong fiscal
third-quarter 2012 results and an enhanced fiscal 2012 guidance.
Moreover, this well-known producer of home and security products
delivered positive earnings surprises in 3 of the last 4 quarters
with an average beat of 63.1%. The long-term expected earnings
growth rate for this stock is 16.3%.
On Oct 23, 2012, Fortune Brands
H&S posted third quarter 2012 adjusted earnings of 29 cents per
share, exceeding the Zacks Consensus Estimate and year-ago
quarters’ earnings of 25 cents and 20 cents, respectively. The year
over year upbeat results benefited from top-line growth and
cost-saving actions.
Total revenue went up 7.2% to
$909.0 million from the year-ago quarter’s level, primarily driven
by higher sales volume from an improving U.S. home products market,
price increases and new product launches. The results beat the
Zacks Consensus Estimate of $900.0 million.
Following the upbeat third quarter
and improvement in the home products market, management raised its
earnings per share outlook for 2012. The company now expects
earnings per share to be between 86 cents and 88 cents, up from the
prior forecast of 77–87 cents.
The Zacks Consensus Estimate for
fiscal 2012 increased 6.0% to 88 cents per share as most of the
estimates were revised higher over the last 90 days. The current
estimate is at the higher end of the company’s guidance range. For
fiscal 2013, estimates were revised higher over the same time
frame, lifting the Zacks Consensus Estimate by 1.8% to $1.15 per
share.
Other Stocks to
Consider
Besides Fortune Brands H&S,
other stocks that are currently performing well include
American Woodmark Corporation (AMWD),
Virco Mfg. Corporation (VIRC) and Pier 1
Imports, Inc. (PIR). All these companies carry a Zacks
Rank #1 (Strong Buy) except Pier 1 Imports, which holds a Zacks
Rank #2 (Buy).
AMER WOODMARK (AMWD): Free Stock Analysis Report
FORTUNE BRD H&S (FBHS): Free Stock Analysis Report
PIER 1 IMPORTS (PIR): Free Stock Analysis Report
(VIRC): ETF Research Reports
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