Valspar (NYSE: VAL) met its estimates last quarter, but investors hope that it will beat them this quarter. The company will unveil its latest earnings on Monday, August 15. Valspar is a global coatings and paints manufacturer and distributor. It operates its business in two reportable segments: Coatings and Paints.
What analysts say:
- Buy, sell, or hold?: Analysts think investors should stand pat on Valspar with eight of 11 analysts rating it hold. Analysts don't like Valspar as much as competitor RPM International overall. Three out of seven analysts rate RPM International a buy compared to three of 11 for Valspar. Analysts still rate the stock a Hold, but they are a bit more wary about it compared to three months ago.
- Revenue Forecasts: On average, analysts predict $1.07 billion in revenue this quarter. That would represent a rise of 22.4% from the year-ago quarter.
- Wall Street Earnings Expectations: The average analyst estimate is earnings of $0.80 per share. Estimates range from $0.75 to $0.84.
What our community says:
CAPS All-Stars are solidly behind the stock with 97% assigning it an "outperform" rating. The community at large concurs with the All-Stars with 89.3% giving it a rating of "outperform." Fools are bullish on Valspar, though the message boards have been quiet lately with only 30 posts in the past 30 days. Though still bullish, the CAPS rating of four out of five stars for Valspar is a bit more pessimistic than the community assessment.
Management:
Valspar's profit has risen year over year by an average of 2.1% over the last five quarters. Revenue has now gone up for three straight quarters. The company's gross margin shrank by 2.2 percentage points in the last quarter. Revenue rose 23.5% while cost of sales rose 27.7% to $677.2 million from a year earlier.
Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.
|
Quarter |
Q2 |
Q1 |
Q4 |
Q3 |
|
Gross Margin |
31.8% |
30.7% |
33.1% |
33.3% |
|
Operating Margin |
10% |
7.5% |
10.5% |
13.7% |
|
Net Margin |
5.7% |
4% |
5.9% |
8.6% |
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