How Do Analysts Rate Joy Global before 2Q16 Earnings?
Analysts have given Joy Global (JOY) an average target price of $14.90. The stock closed at $16.30 on May 24.
Joy Global’s (JOY) shares are trading at a PE (price-to-earnings) ratio of 12.8x. The average PE ratio for industrial companies in the Industrial Select Sector SPDR Fund (XLI) is 15.6x.
Over the last two years, JOY has repurchased 9.8 million shares worth $533 million. However, the company hasn’t repurchased shares during the last two quarters (fiscal 1Q16 and 2Q16).
In fiscal 2015, Joy Global’s product sales slumped to 26% of total revenue, while service sales accounted for 74% of total revenue.
Joy Global’s (JOY) fiscal 2Q16 EPS (earnings per share) estimate is ~-$0.01. In fiscal 1Q16, JOY’s EPS came in at -$0.23, which was below the Market’s expectation of -$0.12.
Joy Global (JOY) will release its fiscal 2Q16 earnings on June 2, 2016. The estimate for fiscal 2Q16 revenue is ~$605.6 million.
US steel imports declined steeply in April on a year-over-year basis while staying relatively flat as compared to March.
Falling steel imports coupled with last year’s supply chain destocking basically left steel buyers high and dry.
The US steel industry has been plagued by cheap imports from countries like China and Korea for quite some time now.
Bunker fuel prices, the biggest cost to run a ship, are correlated with crude oil prices. For the week ended May 20, the average bunker fuel price was $275–$282 per ton.
May started on a strong note with the first two weeks posting higher week-over-week tanker rates. VLCC (very large crude carrier) rates rose by 46% in the first week
The BDTI (Baltic Dirty Tanker Index) stood at 731 on May 23, 2016. For the week ended May 20, 2016—week 20—the BDTI rose to 744 from 732 at the beginning of the week.
US steel production increased 2.5% year-over -year in April, according to data released by the World Steel Association. US steel producers seem reluctant to bring their idled capacities back online.
Global steel production has fallen on a year-over-year (or YoY) basis for 16 consecutive months. In April, production fell 0.43% YoY.
Steel production figures help us understand the steel industry’s supply-side dynamics. Let’s look at the April steel production data released by the World Steel Association.
One of the factors driving steel prices this year is the trend in Chinese steel prices. They rose steeply in March and early April but saw a correction in the last few weeks.
Raw material prices tend to impact steel pricing. Steel scrap, iron ore, and coal are among the key raw materials used in steelmaking.
Steel companies’ earnings are sensitive to changes in steel prices. In recent quarters, their earnings have been negatively impacted by falling steel prices.
While service center steel inventories declined by more than 22% YoY in April, they were almost flat compared to March.
Better-than-expected steel demand and a clampdown on imports have helped US steel companies such as United States Steel (X), AK Steel (AKS), and Nucor (NUE) raise their base selling prices.