Colfax (CFX) Likely to Be Pressured Near-Term - KeyBanc

KeyBanc maintained a Sector Weight rating on Colfax Corporation (NYSE: CFX). Yesterday the company reported Q2 results and names Matthew L. Trerotola as its CEO. Analyst Jeffrey D. Hammond called the CEO departure "unexpected" and thinks shares will be pressured today.

"CFX reported 2Q15 operating EPS of $0.50 vs. our $0.46 estimate (consensus $0.48) as resilient top-line results and visibly improved margins in Gas & Fluid Handling offset weaker performance within Fabrication Technology. Lower shares and taxes accounted for half of the $0.04/share beat. For Gas & Fluid Handling, core sales declined 1% led down by general industrial softness, particularly from significant reductions in steel industry spend. Orders fell 5% organically and now stand 10% below YTD. As expected, Fabrication Technology continued to struggle against oil & gas related weakness, heightened by negatively sustained price/mix (-4%)," said Hammond.

"CEO Steve Simms announced his retirement effective immediately (July 24), and will be replaced by Matthew Trerotola, a former EVP at DuPont and VP of Danaher's Life Sciences group. Despite a better 2Q15, we expect the shares to be under pressure near term in light of the Company's sizable $0.25/share cut to EPS guidance (details below) and surprising CEO change," added the analyst.

For an analyst ratings summary and ratings history on Colfax Corporation click here. For more ratings news on Colfax Corporation click here.

Shares of Colfax Corporation closed at $41.67 yesterday.

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