In the current global economic scenario, when stock markets are witnessing extreme volatility, it is very difficult to decide which stocks to bet on. Even though there is no alternative to a thorough study of the company’s background and fundamentals before investing in any stock, TipRanks’ Analysts’ Top Stocks tool makes life a little easier by providing a list of stocks with a ‘Strong Buy’ or ‘Strong Sell’ analyst consensus rating.
Within the industrial goods industry, Azek Company, Inc. (NYSE: AZEK) and AGCO Corp. (NYSE: AGCO) are two such stocks with a ‘Strong Buy’ rating that recently saw a rating update by analysts. Let’s get to know more about these companies.
Azek Company
Illinois-based Azek is engaged in the design and production of environmentally-sustainable outdoor living products. Its offerings include outdoor cabinets, outdoor lighting, outdoor furniture, porches, wood-look siding, pavers, and decks, among others. The company’s brands include TimberTech, Versatex, StruXure, and AZEK.
Last month, Azek reported better-than-expected results for the fiscal second quarter ended March 31, 2022. Earnings grew 32% year-over-year to $0.33 per share, compared with the Street’s estimate of $0.30 per share.
Net sales increased 35.2% to $396.3 million and the residential segment’s net sales rose 33.6% to $350.4 million.
Along with the results, Azek provided an update on its outlook for Fiscal Year 2022. It now expects net sales to range from $1.39 billion to $1.43 billion and adjusted EBITDA to be between $316 million and $332 million.
For the third quarter, the company anticipates net sales to come in the range of $384 million to $390 million and adjusted EBITDA of $78 million to $82 million.
Recently, Citigroup (NYSE: C) analyst Anthony Pettinari maintained a Buy rating on the stock and lowered the price target to $23 from $24 (37.1% upside potential).
In a research note to investors, Pettinari said, “Azek is well-positioned to deliver growth driven by favorable secular trends in outdoor living and wood substitution.”
Overall, the stock has a Strong Buy consensus rating based on 16 Buys and one Hold. AZEK’s average price target of $27.33 implies 63% upside potential from current levels. Shares have lost almost 59% over the past year.
AGCO Corporation
Based out of Georgia, AGCO manufactures and sells agricultural machinery such as tractors, sprayers, combines, hay tools, foragers, smart farming technologies, seeding and tillage equipment, and more.
Last week, the company announced that it has invested in precision livestock farming solutions provider OPTIfarm. OPTIfarm’s system helps farmers provide an improved environment for their animals, which aids in meeting operational livestock targets.
Eric Hansotia, AGCO’s Chairman, President and CEO, said, “We believe that advances in modern animal agriculture, like OPTIfarm, can help producers care for their animals and reduce environmental impact while maximizing productivity.”
Meanwhile, last month, AGCO posted upbeat results for the first quarter of 2022. Earnings came in at $2.39 per share, compared with the previous year’s EPS of $2 and the Street’s estimate of $1.91 per share.
Based on four Buys and one Hold, the stock has a Strong Buy consensus rating. AGCO’s average price target of $162 implies 50.3% upside potential from current levels. Shares have lost 9.7% over the past year.
Conclusion
Even though both AGCO and AZEK stocks have declined over the past 12 months, they have strong growth potential. These stocks have been consistently beating analysts’ earnings expectations for the last couple of years. Both stocks are currently trading near the lower end of their 52-week price range, which potentially makes them an attractive investment option.
