Park-Ohio Holdings Receives a Hold from FBR Capital

By Carrie Williams

FBR Capital analyst Christopher Van Horn reiterated a Hold rating on Park-Ohio Holdings (NASDAQ: PKOH) today and set a price target of $33. The company’s shares opened today at $37.35.

Van Horn noted:

“We see several opportunities for Park-Ohio to grow and improve margins during 2017; however, we believe that there are still some challenges left and that upside for shares appears limited in the near term. This company continues to be attractive from a capital deployment perspective: In 2016, the company funded $28 million in capital expenditures, repaid $33 million in debt, paid out about $6 million in dividends, and acquired GH Electrotermia (accretive to earnings) for $31 million. Cash balance at year-end 2016 was $64 million, versus $62 million at year-end 2015. Yet certain end markets, from a macro perspective, appear to remain somewhat challenging. Heavy-duty truck revenue was down 33% in 2016 and does not look poised for a meaningful recovery this year; the oil & gas market continues to put pressure on the engineered products segment, as does the rail business. Pockets of growth, like A&D, are somewhat occluded by these headwinds, although we believe this could change over the long term.”

According to TipRanks.com, Horn is a 5-star analyst with an average return of 14.0% and a 70.1% success rate. Horn covers the Consumer Goods sector, focusing on stocks such as Standard Motor Products, Harman International, and Tower International.

Park-Ohio Holdings has an analyst consensus of Hold, with a price target consensus of $33.

Based on Park-Ohio Holdings’ latest earnings report for the quarter ending December 31, the company posted quarterly revenue of $307 million and quarterly net profit of $6.5 million. In comparison, last year the company earned revenue of $347 million and had a net profit of $11.7 million.

Based on the recent corporate insider activity of 40 insiders, corporate insider sentiment is neutral on the stock. Most recently, in December 2016, Robert Vilsack, the Secretary & General Counsel of PKOH sold 8,000 shares for a total of $339,616.

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Park-Ohio Holdings Corp. engages in the provision of supply chain logistics services and manufactures aluminum products. It operates in three segments: Supply Technologies, Assembly Components, and Engineered Products. The Supply Technologies segment provides customers with total supply management services for a broad range of high volume, specialty production components. The Assembly Components segment manufactures cast aluminum components, automotive and industrial rubber and thermoplastic products, fuel filler and hydraulic assemblies for automotive, agricultural equipment, construction equipment, heavy duty truck and marine equipment industries. It also provides value-added services such as design and engineering, machining and assembly. The Engineered Products segment operates a diverse group of niche manufacturing businesses that design and manufacture a broad range of high quality products engineered for specific customer applications. The company was founded in 1998 and is headquartered in Cleveland, OH.