LECO - Lincoln Electric Dips 21% in 3 Months: Will It Recover? | Benzinga
Lincoln Electric Holdings, Inc. (NASDAQ: LECO) shares have lost 20.9% in the past three months compared with the industry's 10% decline. This mainly reflects escalating freight and material costs. Low volumes in the Harris Products Group add to the woes.
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High Costs, Weakness in Harris Products Group Ail
Lincoln Electric is witnessing inflationary headwinds from escalating labor and raw material costs that impacted its margins. In addition, continued risks of possible supply-chain disruptions are expected to result in lower operating activity and higher inefficiencies in the business.
The Harris Products Group's revenues have been bearing the brunt of lower volumes for the past four quarters, reflecting weak demand. Lower volumes primarily reflect soft residential-oriented applications (HVAC, plumbing). This will continue to weigh on the segment's results.
The company has a market capitalization of around $3 billion. It currently carries a Zacks Rank #3 (Hold). Let us discuss the factors that indicate that the stock might stage a comeback.
Strong Backlogs & Demand in Most Markets: Lincoln Electric has witnessed improving order rates across all end-market sectors, regions and products. The company is seeing strong quoting activity and high backlogs for equipment systems and automation solutions. The company's equipment sales are being driven by solid demand across direct and distribution channels. Robust backlog and acquisitions are expected to benefit the company's performance through this year.
Focus on Pricing: LECO has also been effectively managing to counter raw ...