On Jul 12, Lindsay Corporation (NYSE:LNN) was upgraded to a Zacks Rank #2 (Buy) on improved activity levels in the international irrigation and infrastructure markets.
Going by the Zacks model, companies holding a Zacks Rank #2 have chances of performing better than the broader market in the quarters ahead.
Over the past six months, Lindsay outperformed the Zacks categorized Machinery-Farm industry. While the stock gained 20.7%, the Zacks sub-industry recorded 19% growth.
Why the Upgrade?
In the third-quarter conference call, Lindsay noted that it remains confident about the stabilization in the U.S. irrigation equipment market. The positive view is backed by increasing demand for food owing to rising population, favorable government policies on agricultural machinery and increasing adoption of precision farming.
Notably, Lindsay’s irrigation operating margin performance in the U.S. will benefit from the strength and growth of technology products. In Apr 2017, Lindsay rolled out FieldNET Advisor, an irrigation management solution. FieldNET Advisor enables growers to maximize profitability through better irrigation management.
In the infrastructure segment, Lindsay remains positive about Road Zipper System projects, as well as increased demand for its road safety products. The growing need for infrastructure development and improvement in the U.S., along with a desire for increased spending, will drive growth and demand for critical road safety products.
We believe that the company’s continuous efforts for the expansion of its solutions offering and improvement of global cost structure will definitely help it gain momentum and boost the top line. Moreover, a consistent recovery in Brazil and increased project activity in developing international markets will stoke growth.
Lindsay also has a positive record of earnings surprises for the last few quarters. The company’s estimates moved up 2.8% for fiscal 2017 and 2.7% for fiscal 2018, over the past 30 days, reflecting investors’ optimism in the stock.
Lindsay Corporation Price and Consensus
Lindsay Corporation Price and Consensus | Lindsay Corporation Quote
Other Stocks to Consider
Other top-ranked stocks in the same sector are Apogee Enterprises, Inc. (NASDAQ:APOG) , Lakeland Industries, Inc. (NASDAQ:LAKE) and Deere & Company (NYSE:DE) . All three stocks boast a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Apogee has an average positive earnings surprise of 3.42% for the trailing four quarters. Lakeland generated an average positive earnings surprise of 49.26% over the past four quarters. Deere has an average positive earnings surprise of 70.41% for the trailing four quarters.
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