Has Joy Global Bottomed Out?
Stephen Simpson, CFA
Stephen Simpson, CFA
Joy Global Tries To Beat The Cycle With Better Margins
Stephen Simpson, CFA
Stephen Simpson, CFA
Mon, Jun. 13, 10:33 AM
Thu, Jun. 2, 9:15 AM
Mon, May 23, 12:47 PM
- It's too soon to be bullish on metals and mining stocks, Axiom Capital's Gordon Johnson says, as he thinks the Fed’s hawkish commentary last week will trigger another leg down for many global metals, mining and mining equipment stocks.
- Johnson sees the most pressure on the group coming from China, where he predicts significant further devaluation of the yuan and a softening in property prices in coming months; Johnson says April’s numbers were mostly positive on a Y/Y and M/M basis but that they were more mixed than in previous months.
- Axiom maintains Sell ratings on Caterpillar (CAT +1.1%), Joy Global (JOY +1.3%), US Steel (X +5%), Cliffs Natural Resources (CLF +6.3%), Rio Tinto (RIO -0.1%), United Rentals (URI -0.1%), GATX (GMT +0.9%) and Trinity Industries (TRN +0.3%).
Mon, May 9, 12:50 PM
Mon, May 9, 10:18 AM
- The stock is down 10.3%, plunging in early trade.
- Now read Is Joy Heading For A Fresh Selloff?
Fri, Apr. 15, 3:42 PM
- Recent coal bankruptcies from Peabody Energy and others actually are good news for Joy Global (JOY +4.4%) - indeed a counter-intuitive positive catalyst - Baird's Mircea Dobre and Joseph Grabowski claim.
- The analysts say they take their cue from JOY CEO Ted Doheny, who told them that he views pre-filing behavior as “stressing equipment and suppliers” forcing suppliers to move to cash up front mode in some cases, while post-filing behavior is akin to “stabilization,” particularly when it comes to demand for service and parts, items directly related to current and future customer cash flow generation.
- "The near term remains rocky but be brave... buy," the Baird pair says.
- Now read Is Joy heading for a fresh selloff?
Wed, Apr. 13, 2:24 PM
- Investors should take profits on machinery stocks ahead of earnings, J.P. Morgan analysts say, as valuations are stretched after the sector outperformed the S&P in Q1 +17% vs. +1.3%, and investors likely will have little tolerance for weaker than expected performance.
- The firm suggests avoiding Deere (DE +1.9%), Agco (AGCO +3.5%) and CNH Industrial (CNHI +3%) on weaker fundamentals with downside risk to the market outlooks for each region, and Paccar (PCAR +2.9%) on weaker NAFTA HD truck demand vs. its guide for a 12% decline in U.S. and Canada retail sales.
- However, JPM likes Allison Transmission (ALSN +2.4%) heading into Q1 as it has underperformed peers while its exposure to HD Class 8 long haul is limited and MD orders are up 5% YTD.
- Rated Neutral CAT, MTW, JOY, NAV, TEX, MCRN, PH, KMT, ETN, ITW.
Wed, Apr. 6, 10:45 AM
Mon, Mar. 28, 10:33 AM
- JPMorgan’s Ann Duignan and Michael Conlon "remain cautious" on Joy Global (JOY -3.1%) despite the stock's rally this year:
- "We hosted a call with Joy's CFO, Jim Sullivan, to discuss the company’s restructuring actions as well as a look back at the cycle. One of the key points of discussion included a comparison between FY’06 and FY’16E as sales were about the same but profits are expected to be significantly lower."
- "Overall, the CFO noted that its customers have had a more optimistic tone of late, but there has been no real change in the trajectory of orders for JOY."
- "We remain cautious as the stock has rallied YTD +21% (vs. the S&P 500's -0.4%) while the fundamentals remain weak, especially in U.S. and China coal sectors."
Wed, Mar. 16, 11:57 AM
- The bad news coming from Peabody Energy and other coal companies could damage Joy Global (JOY -0.3%), as Axiom Capital analyst Gordon Johnson notes that 59% of JOY's 2015 revenues came from the sale of equipment to coal miners globally.
- "Along these lines, we feel the announcement by BTU today could have incrementally negative implications for JOY’s ability to achieve its FY 2016 guidance,” Johnson writes.
- According to Johnson, JOY’s OEM revenues historically have an 87% correlation to the mining capex of the big five U.S. coal miners: Peabody (BTU -43.6%), Arch Coal (ACI -3.4%), Consol Energy (CNX -1.4%), Alliance Resource Partners (ARLP -0.1%) and Cliff Natural Resources (CLF -8.4%).
Mon, Mar. 14, 2:58 PM
- Joy Global (JOY +3.1%) is higher today but Axiom Capital’s Gordon Johnson argues that JOY is repeating last years' guidance mistakes in 2016 by predicting a back-end loaded year for earnings and revenues.
- Johnson still rates JOY as a Sell, and believes the company is setting itself up for multiple downward revisions later this year.
- JOY’s bookings fell to lows not seen since Q1 2009 at $617M in Q4 2015 from $782M a year ago, forcing the company to eventually cut the degree to which FY 2015 earnings would be back-end loaded, despite reiterated guidance several times during the year, compromising investor confidence and sending the stock tumbling; on JOY’s recently lowered Q1 2016 guidance, "things look oddly similar, yet a bit worse," Johnson says.
Thu, Mar. 3, 10:10 AM
- Joy Global (JOY +15.8%) is soaring in early trade, after sitting in the red during most of premarket action.
- FQ1 results missed expectations, dividend was in line and no share repurchases were announced, guidance fell slightly short of estimates...What happened?
- Previously: Joy Global sinks after missing expectations (Mar. 03 2016)
Thu, Mar. 3, 7:41 AM
- Adjusted net loss of $22.4M, or -$0.23 per diluted share vs. net income $29.2M, or $0.29 per diluted share in the same quarter a year ago.
- Consolidated bookings fell 21% Y/Y to $550M. Service bookings dropped 18% to $432M.
- Backlog at the end of the quarter was $897M vs. $873M at the beginning of the year.
- Capital expenditures were $8M, compared to $22 million in the prior year first quarter.
- During the quarter, the company again did not repurchase any shares of its common stock.
- "Taking into account current weaker market conditions, we now expect sales...to be towards the middle of our previous guidance range of $2.4B-$2.6B and $0.10-$0.50 for adjusted earnings per fully diluted share," CEO Ted Doheny said. "With regard to phasing across the fiscal year, we expect all of our adjusted earnings will come in the second half of the fiscal year."
- FQ1 results
- JOY -2.4% premarket
Wed, Mar. 2, 9:21 AM
- Axiom downgrades Joy Global (NYSE:JOY) to Sell from Hold, while lowering its price target to $10 from $11.
- Analyst Gordon Johnson expects the company to revise the midpoint of its 2016 guidance lower and anticipates continuing pressure on the firm's OEM and After-Market margins.
- JOY -4.2% premarket
- Previously: Joy Global: Short term pain & long term value - Forward View (Feb. 09 2016)
- Previously: Joy Global downgraded to Sell at UBS (Jan. 04 2016)
Tue, Feb. 9, 10:01 AM
- Forward View Consulting downgrades Joy Global (JOY -5.1%) from Speculative Buy to Hold, with a price target of $13 (from $21).
- "Although we don't advise buying Joy shares at this time, an opportunity for reward does exist in the future. Mining definitely isn't dead, and Joy will be in business as long as somebody wants to dig something out of the ground."
Tue, Jan. 26, 2:12 PM
- Terex (TEX +43%) shares resume trading after a halt, soaring higher as the company confirms receiving a $30/share takeover offer from Zoomlion of China.
- TEX says it has entered into a confidentiality agreement with Zoomlion and is discussing the proposal, which values the company at ~$3.3B; TEX says it will not comment further until the board has completed its review.
- TEX had entered into an agreement to merge with industrial crane maker Konecranes (OTC:KNCRF) and TEX's board says it continues to support the proposed deal.
- Word of the proposal had been reported earlier by Bloomberg.
- Peers Manitowoc (MTW +14.3%) and Joy Global (JOY +8.6%) also trade higher on the news.
Joy Global, Inc. manufactures and distributes mining equipment for the extraction of coal and other minerals and ores. Its equipment are used in major mining regions throughout the world to mine coal, copper, iron ore, oil sands and other minerals. It has two business segments: Underground... More
Sector: Industrial Goods
Industry: Farm & Construction Machinery
Country: United States
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