In a report released today, Mircea Dobre from Robert W. Baird downgraded Alamo Group (ALG – Research Report) to a Hold, with a price target of $177.00.
Mircea Dobre has given his Hold rating due to a combination of factors impacting Alamo Group’s financial outlook. The company is experiencing a peak in industrial orders, which is expected to extend through 2025, but this segment might become a challenge by 2026, potentially offsetting any recovery in the vegetation segment. This situation suggests a period of flat or declining earnings over the next two years, even before considering potential future impacts from tariffs or rising material costs.
Additionally, while the company’s headline earnings per share exceeded consensus expectations, this was largely due to non-operating items, with operational performance falling short of estimates. Sales have decreased year-over-year, particularly in the vegetation segment, which has been affected by higher interest rates and excess inventories. The industrial segment, although showing growth, may not sustain its current momentum. These factors contribute to a cautious outlook, justifying the Hold rating.
Based on the recent corporate insider activity of 37 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ALG in relation to earlier this year.