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Based in Berwyn, Pennsylvania, AMETEK, Inc. (AME) manufactures and sells electronic instruments and electromechanical devices. Valued at a market cap of $38.3 billion, the company has evolved from a provider of heavy machinery to a manufacturer of advanced analytical, test, and measurement instrumentation for the energy, aerospace, power, research, medical, and industrial markets.
Companies worth more than $10 billion are generally labeled as “large-cap” stocks, and AMETEK fits this criterion perfectly. The company has expanded through more than 90 acquisitions since 2000, operates in approximately 150 locations across 31 countries, and owns 175 market-leading brands.
Shares of AME are trading 11.2% below their 52-week high of $186.32, which they hit on Mar. 21. AME has declined 4.7% over the past three months, lagging behind the broader Dow Jones Industrials Average’s ($DOWI) 5.4% gain over the same time frame.
In the longer term, AME stock has marginally increased on a YTD basis, lagging behind DOWI’s 8.3% rise. Shares of AME have gained 9.1% over the past 52 weeks, underperforming DOWI’s nearly 17.8% returns over the same time frame.
To confirm its bearish trend, AME has been trading below its 200-day moving average since late August and has remained below its 50-day moving average since early September.
On Aug. 1, AME fell 8.3% following its Q2 earnings release as its revenues of $1.73 billion missed Wall Street estimates of $1.77 billion. The company’s reduced full-year earnings guidance to $6.70-$6.80 further dampened investor confidence. However, AME recorded a 6% year-over-year adjusted earnings growth to $1.66 per share, surpassing the consensus estimates of $1.64 per share.
AME’s underperformance becomes more evident compared to its rival, Dover Corporation (DOV), which gained 20% on a YTD basis and 31% over the past 52 weeks.
Despite AME’s underperformance, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from 13 analysts in coverage, and the mean price target of $185.83 suggests a 12.3% premium to its current levels.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
