Oshkosh: Zacks’ Bear of the Day Play

Industrial equipment and machinery makers have taken a big hit in the past few months as investors worry about China and domestic growth.

While Caterpillar (CATAnalyst Report) is down only 10% in the last quarter, Oshkosh Corp (OSKSnapshot Report) has been one of the hardest hit, falling over 40% to its recent lows at the end of July following the company’s Q3 2015 earnings miss.

The company also lowered 2015 guidance with an adjusted EPS forecast of $3.00-3.25 (previously $3.75-$4.00) which compares to the $3.76 consensus. Their revenue projection of $6.1 billion (previously $6.5-6.6 billion) compares to a consensus of $6.36 billion.

OSK investors may be taking some solace in the fact that the earnings report seemed to mark a capitulation bottom under $33 after the fall from 52-week highs above $55 in May. But all eyes must remain on the earnings path now and whether segments like Defense will experience the same sort of decline seen in Access (lifts, etc.).

Here are the Zacks Detailed EPS tables for OSK…

The Zacks Rank warned investors in late April when OSK received a #4 Sell Rank. That early sign that estimates were entering a decline was critical information for the last 2 quarterly reports.

While estimates may be stabilizing and the valuation getting attractive, investors should wait for updates approaching the 4th quarter to see if the estimates truly stop the downtrend and find some lift. The Zacks Rank will let you know.

Kevin Cook is a Senior Stock Strategist for Zacks where he runs the Follow The Money portfolio.


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