Barnes Hits New 52-Week High on Organic, Inorganic Prospects

Shares of Barnes Group Inc. B reached a new 52-week high of $59.78 during its trading session on Jun 8. This apex improved upon the last 52-week high of $59.00 on Jun 2.

In the last three months, shares of the company have yielded 20.70% return, outperforming the gain of just 5.82% seen by the Zacks categorized Machinery General Industrial industry.

On Jun 8, Barnes Group closed its trading session at $59.60, yielding a year-to-date return of roughly 26.3%. The trading volume for the session was approximately 0.22 million shares. Positive earnings estimate revisions for 2017 and 2018, along with an expected earnings growth rate of 9% for the next five years indicate the stock's potential for further price appreciation.

Growth Drivers

In the last four quarters, Barnes Group reported better-than-expected results. Average earnings surprise was a positive 8.94%. In first-quarter 2017, the company's earnings of 71 cents per share surpassed the Zacks Consensus Estimate of 60 cents by 18.33%. Organic revenues were up 15% year over year while total revenue grew 19%.

In the quarters ahead, Barnes Group anticipates benefiting from its growth strategies and realization of benefits from Barnes Enterprise System. The company has raised its projections for 2017. Total revenue is now anticipated to grow in an 8−9% range, including organic growth rate of 5−6%. This is an increase from the earlier projection of 6−8% total revenue growth and 3−5% organic sales growth. Adjusted earnings are predicted to be $2.68−$2.78 per share versus $2.61−$2.76 expected earlier.

In addition, Barnes Group believes in expanding its operations via inorganic means. In 2016, the company's acquired assets contributed $75 million to sales. In Mar 2017, it agreed to acquire the privately held Gammaflux L.P. These assets will be integrated with the company's Molding Solutions business.      
 
Over the last 60 days, the Zacks Consensus Estimate for Barnes Group increased roughly 3% to $2.78 for 2017 and 2.7% to $3.01 for 2018. These estimates represent year-over-year growth of 9.88% for 2017 and 8.13% for 2018.

Barnes Group, Inc. Price and Consensus

 

Barnes Group, Inc. Price and Consensus | Barnes Group, Inc. Quote

Zacks Rank & Other Stocks to Consider

With a market capitalization of $3.2 billion, Barnes Group currently carries a Zacks Rank #2 (Buy). Other stocks worth considering in the industry include Kennametal Inc. KMT, Parker-Hannifin Corporation PH and Regal Beloit Corporation RBC. While both Kennametal and Parker-Hannifin sport a Zacks Rank #1 (Strong Buy), Regal Beloit carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.

Kennametal's earnings estimates for fiscal 2017 and fiscal 2018 were revised upward in the last 60 days. Also, the company's average earnings surprise for the last four quarters was a positive 6.24%.

Parker-Hannifin's average earnings surprise for the last four quarters was a positive 14.94%. Also, earnings expectations for fiscal 2017 and fiscal 2018 improved over the past 60 days.

Regal Beloit's earnings estimates for 2017 and 2018 were revised upward in the last 60 days. Also, the company's average earnings surprise for the last four quarters was a positive 1.48%.

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