Oshkosh Expects Supply Chain Drags to Lower Q4 Revenues


Oshkosh Corporation (OSK) has said that it expects to report revenues and earnings for the fourth quarter of Fiscal Year 2021 lower than the previous guidance. The company designs, manufactures, and markets specialty vehicles and vehicle bodies.

Preliminarily, it expects to report fourth-quarter revenues of nearly $2.05 billion and adjusted EPS in the range of $0.90 to $0.95. The consensus estimates stand at $2.1 billion for revenue and $1.51 for EPS.

The lower guidance is a result of supply chain and logistics disruptions, along with rising material and freight costs. Furthermore, the unavailability of parts has impacted Oshkosh’s ability to produce and ship units, particularly at Access Equipment. It has also resulted in labor inefficiencies. (See Oshkosh stock charts on TipRanks)

The company has been increasing prices in its non-defense segments over the past six to nine months to counter the rising input costs. It expects to take additional pricing actions in case costs continue to escalate.

The President and CEO of Oshkosh, John C. Pfeifer, said, “Despite the near-term pressure, we maintain a positive outlook for our businesses as we expect robust customer demand to continue for our Access Equipment, Fire & Emergency and Commercial segments.”

Following the news, Stifel Nicolaus analyst Stanley Elliott maintained a Buy rating on Oshkosh but lowered the price target to $130 from $141. The new price target implies 28.9% upside potential from current level.

Elliott is of the opinion that the underlying demand dynamics remain healthy. He expects the supply chain challenges and inflation headwinds to stay through the end of 2021.

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Overall, the rest of the Street is bullish on the stock and has a Strong Buy consensus rating based on 7 Buys and 2 Holds. The average Oshkosh price target of $132.67 implies upside potential of about 31.6% from current levels.

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Oshkosh, with 6.2% of investors on TipRanks increasing their exposure to OSK stock over the past 30 days.

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