Graco (NYSE:GGG), a leading fluid and coating equipment manufacturer, is set to release its Q4 earnings tomorrow afternoon. This preview outlines key expectations and recent performance indicators for the company.
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Graco’s previous quarter saw a revenue miss of 3.4% against analyst expectations, reporting $519.2 million, a year-on-year decrease of 3.8%. The company also significantly underperformed on adjusted operating income estimates. This quarter, analysts predict a further revenue decline of 1.7% year-on-year, reaching $556.9 million. This contrasts with the 2.1% revenue growth observed in the same quarter last year. Adjusted earnings per share are projected at $0.76.
Analyst Expectations and Peer Performance
Analysts have largely maintained their Graco earnings estimates over the past month, indicating a stable outlook heading into the announcement. Historically, Graco has fallen short of Wall Street revenue projections five times in the last two years.
Examining Graco’s peers in the industrial machinery sector provides further context. 3M (NYSE:MMM) recently reported a 3.2% year-on-year revenue decrease, missing expectations by 0.8%. Worthington (NYSE:WOR) experienced an 8.1% revenue decline, aligning with consensus estimates. Despite these revenue drops, both 3M and Worthington saw positive stock movement post-earnings, with increases of 5.7% and 10.2%, respectively.
Industry Trends and Graco’s Outlook
The industrial machinery sector has witnessed positive investor sentiment recently, with average share prices rising 6.3% over the last month. During this period, Graco’s stock has gained 2.5%. The current average analyst price target for Graco stands at $91.75, exceeding its current share price of $85.86.
Conclusion: Navigating Uncertain Waters
Graco’s upcoming earnings report will provide crucial insights into the company’s performance amidst challenging market conditions. While analyst expectations point towards a revenue decline, recent trends in the industrial machinery sector suggest potential for positive market reaction. Investors will be closely monitoring Graco’s ability to navigate these challenges and deliver results that meet or exceed expectations.
