It wasn't shaping up to be a good stretch of days for Core & Main(NYSE: CNM) shareholders. In the abbreviated trading week, the specialized industrial company's stock tumbled by almost 21%, according to data compiled by S&P Global Market Intelligence. The major news from the company during the period wasn't very encouraging, after all. Nor was the resulting clutch of analyst price target reductions.
A quarter to forget
Core & Main, which concentrates on products for utilities and large industrial clients, reported its second-quarter earnings Wednesday before the market open. The good news was that sales rose by nearly 6% (to $1.96 billion), and net income ticked up by 8% to $119 million, or $0.61 per share.
Discouragingly, though, both headline metrics came in well under the average analyst estimates. Compounding that, Core & Main management trimmed its guidance for full-year revenue. It attributed both its disappointing performance and the guidance modification to weather disruptions, among other factors.
Analysts get more gloomy
In the following days, several pundits following Core & Main stock reduced their expectations for its future. Among these was Truist's Keith Hughes, who now believes the shares are worth $38 apiece. That's quite some distance from his former level of $50.
Hughes maintained his hold recommendation on Core & Main, writing in a new research note of the "unusual" weakness in the company's crucial municipal client segment. He also felt that the negative investor reaction was due largely to that guidance reduction, and that the market generally expects more cuts in the future.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
