Albany International Corporation (AIN) rises to 52 weeks, time to cash in?

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Shares of Albany International (AIN) have been a strong performer of late, with the stock rising 14% in the past month. The stock hit a new 52-week high at $92.88 in the previous session. Albany International gained 3.2% year-to-date compared to the -15.5% move for the Zacks Industrial Products sector and the -2.4% return for the Zacks Textile – Products industry.

What drives outperformance?

The stock has an impressive track record of positive earnings surprises, as it has only missed our consensus earnings estimate for the past four quarters. In its latest earnings report dated July 25, 2022, Albany International reported EPS of $1.06 versus consensus estimate of $0.79, as it beat the consensus revenue estimate by 11.09% .

For the current fiscal year, Albany International is expected to post earnings of $3.48 per share on revenue of $985.05 million. This represents a variation of -2.25% in EPS on a variation of 6.01% in sales. For the next fiscal year, the company is expected to earn $3.61 per share on $1.04 billion in revenue. This represents a year-over-year change of 3.74% and 5.98%, respectively.

Evaluation Metrics

Albany International may be at a 52-week high right now, but what might the future hold for the title? A key aspect of this question is looking at the valuation metrics to determine if the business is due for a pullback from that level.

On that front, we can look at Zacks-style scores, as they offer investors a variety of ways to browse stocks (beyond looking at a stock’s Zacks ranking). These styles are represented by ratings ranging from A to F in the Value, Growth and Momentum categories, while there is also a combined VGM score. The idea behind style scores is to help investors choose the most appropriate Zacks Rank stocks based on their individual investment style.

Albany International has a value score of C. The stock’s growth and momentum scores are B and A, respectively, giving the company a VGM score of B.

In terms of value distribution, the stock currently trades at 26.2X current year EPS estimates, which is a premium to the comparable industry average of 18.3X. Based on rolling cash flow, the stock is currently trading at 15.4X versus its peer group average of 5.4X. Additionally, the stock has a PEG ratio of 4.59. That’s not enough to put the company at the top of all the stocks we cover from a value perspective.

Zacks Rank

We also need to look at the Zacks ranking for the stock, as this overrides any trend on the style score front. Fortunately, Albany International currently has a Zacks rank of #2 (buy) thanks to rising earnings estimates.

Given that we recommend investors pick stocks with Zacks rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks like Albany International fits the bill. So, it looks like Albany International shares could still be poised for more gains to come.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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