Valspar Corp. (VAL) has beaten the Zacks Consensus in each of the last four quarters by an average of 18.3%.
Growth and Income
The company is expected grow it EPS 16.3% in fiscal 2010, 11.9% in fiscal 2011, and 10% per year for the long term. The stock also offers investors a dividend yield of 2.0%.
This Zacks #2 Rank stock trades at a reasonable 15.2x fiscal 2010 consensus EPS estimates and 13.6x fiscal 2011 consensus EPS estimates.
Business
Valspar manufactures and distributes coatings, paints, and related products primarily in the U.S., China, and Europe.
For the last two years, Valspar has focused on improving its operational excellence by consolidated plants, reducing headcount, rolling out new products, and managing raw material costs.
Fiscal First-Quarter Results
On Feb 16, the company announced that first-quarter sales totaled $672.4 million, a 5.1% increase from the same period last year. Adjusted net income per share was $0.36, up 80% from the year-ago quarter, and 9 cents above the Zacks Consensus Estimate.
Chairman and CEO William Mansfield said that new “business and share gains, together with our focus on productivity and cost control, are helping to offset ongoing weakness in U.S. industrial markets.”
Company Outlook
The company expects top-line growth to be consistent with its previous results and earnings per share of $1.85-$2.05, excluding restructuring charges.
Estimates Inching Higher
Valspar last reported earnings on Feb 16, so news flow from the company’s operations has been slow. As a result, there has been very little movement from the analysts covering the stock.
That said, in the last 30 days, the Zacks Consensus Estimate for fiscal 2010 is up 2 cents to $1.52, and the 2011 Zacks Consensus Estimate is up 4 cents to $2.30.
The Chart
Valspar shares are up 42% since bottoming out on July 9, 2009. The stock experienced a shallow pullback of about 6% in February, but it has rebounded nicely in recent months. Its up 23.6% of its Feb lows and now trades about 5% below its 52-week high.
