Alamo Group (NYSE:ALG) Downgraded to Hold Rating by Baird R W

On March 2, 2025, Alamo Group (NYSE:ALG) experienced a significant change in its investment outlook as Baird R W research analysts lowered their rating from "strong-buy" to "hold". This decision, shared in a report released on Friday, indicates a cautious stance on the company's stock performance.

In addition to Baird R W's assessment, other analysts have been actively evaluating Alamo Group's performance. For instance, StockNews.com recently upgraded the company's rating from "hold" to "buy" in a note published on February 25. Meanwhile, Robert W. Baird revised its recommendations, moving from an "outperform" rating to a "neutral" rating, also adjusting the price target for the stock from $224.00 to $177.00.

Current Stock Performance

On the day of the downgrade, ALG's stock opened at $175.02. Financial metrics indicate a quick ratio of 2.39 and a current ratio of 4.15, suggesting solid liquidity. The company's debt-to-equity ratio stands at 0.21, reflecting a conservative approach to leveraging. Over the last fifty days, the simple moving average was recorded at $183.83, while the two-hundred day average was $184.03. The stock has fluctuated within a twelve-month range, with a low of $163.74 and a high of $228.88. Alamo Group’s market capitalization is approximately $2.11 billion, and it carries a price-to-earnings ratio of 17.63, with a beta of 1.10, indicating its volatility compared to the broader market.

In its latest earnings report released on February 27, Alamo Group recorded earnings of $2.39 per share, surpassing the consensus estimate of $2.23 by $0.16. The company reported a return on equity of 12.41% and a net margin of 7.19%. However, revenue for the quarter was $385.32 million, falling short of projections which estimated $396.85 million. Analysts anticipate that Alamo Group will achieve 9.53 earnings per share for the fiscal year.

Insider Transactions

In related corporate actions, Vice President Janet S. Pollock sold 257 shares of the company on December 16, with the shares sold at an average price of $193.41, totaling approximately $49,706.37. Following the sale, Pollock’s remaining stock holdings stand at 3,360 shares, valued at about $649,857.60, which indicates a 7.11% reduction in her ownership. This transaction was reported in SEC filings available for public scrutiny.

Institutional Investor Activity

Alamo Group has seen considerable interest from institutional investors. Wellington Management Group LLP acquired a new stake valued at around $35.76 million during the third quarter. Bank of America Corp DE significantly increased its position by 826.1% in the fourth quarter, now holding 130,494 shares valued at $24.26 million after buying an additional 116,404 shares. SG Capital Management LLC also bought a new stake worth approximately $16.97 million, while Ameriprise Financial Inc. increased its holdings by 338.4%, owning 115,856 shares valued at $21.54 million after acquiring 89,430 shares. D. E. Shaw & Co. Inc. raised its stake by 279.3%, now owning 55,068 shares valued at about $10.24 million. Overall, institutional investors control 92.36% of Alamo Group’s stock.

Company Overview

Alamo Group Inc. specializes in the design, manufacturing, distribution, and servicing of vegetation management and infrastructure maintenance equipment for various sectors including government, industrial, and agricultural markets worldwide. The company operates through two main segments: Vegetation Management and Industrial Equipment. The Vegetation Management Division provides an array of equipment including hydraulically-powered mowers, other cutters, and heavy-duty mowing and vegetation maintenance equipment.

Conclusion

The recent downgrade by Baird R W reflects a cautious approach towards Alamo Group, amidst a backdrop of varied analyst opinions and notable insider trading activity. Investors should consider this information when evaluating their position in the company.

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