Even though most analysts have been hailing an expected boom in infrastructure and equipment purchases in the agricultural sector, the weak margins of Lindsay Corporation (NYSE:LNN) reveals there is still pricing pressures in the narrative going forward.
Wedbush said, "Irrigation outlook favorable, but do not expect full recovery in earnings yet. We believe caution is in order given lower than expected margins in the most recent quarter, the unpredictable nature of the infrastructure market, and the volatility in the agriculture segment. While the irrigation market is showing healthy signs of improvement, its growth is still uncertain; and the infrastructure market will likely remain lumpy.
"As a result of the shortfall, we are reducing our 2011 EPS to $1.96 from $2.26, and reducing our Q2 EPS estimate to $0.56 from $0.61, to account for lower margins in the infrastructure business."
Wedbush maintains a "Neutral" on Lindsay Corporation, which last closed at $61.82, down $0.18, or 0.29 percent. Wedbush has a price target on them of $53.
No comments:
Post a Comment