Brady Stock Flashes Mixed Signals Ahead of Earnings

Brady will release fiscal fourth-quarter earnings report on Thursday morning

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Brady Corporation (NYSE:BRC) is a manufacturer and marketer of products for identifying components used in workplaces. BRC’s products help customers increase safety, security, productivity, and performance and include labels, signs, safety devices, printing systems, and software. Brady Corporation also has a diverse customer base in electronics, telecommunications, manufacturing, electrical, construction, medical, aerospace and a variety of other industries. This afternoon, BRC is trading up 0.5% at $53.65. 

Brady Corporation announced on Aug. 23 that the leadership team will release fiscal fourth-quarter earnings on Thursday, Sept. 2. Furthermore, the workplace brand has outperformed earnings expectations on three of the last four quarterly earnings reports released.

For Q4 of fiscal 2020, Brady Corporation beat analysts’ estimates by a margin of $0.01, reporting an EPS of $0.53. For Q1 of fiscal 2021, the company's EPS increased to $0.64, beating expectations by a margin of $0.07. For Q2 of fiscal 2021, BRC had a decrease in earnings, dropping to $0.59 per share and missing estimates by a margin of $0.02. For Q3 of fiscal 2021, Brady Corporation reported an EPS of $0.71 and beat expectations by a margin of $0.05.

Brady stock has increased about 12% in price year-over-year and 42% since bottoming at a 52-week low of $37.47 last October. Additionally, shares of BRC have grown 3% year-to-date. However, Brady stock is currently down 14% since reaching its record-high of $61.76 in early June. Moreover, Brady Corporation offers a forward dividend of $0.88 and a dividend yield of 1.67%.

From a fundamental perspective, Brady Corporation offers mixed signals. BRC’s revenues have been decreasing in recent years and are down 7% since fiscal 2018 after experiencing back-to-back annual revenue declines in fiscal 2019 and fiscal 2020. Brady stock has a forward price-earnings ratio of 15.85, which is a significant improvement from its current price-earnings ratio of 21.72. BRC also holds a strong balance sheet with $321.8 million in cash and only $42.04 million in debt.

The two analysts covering BRC are split toward the equity. Specifically, one sports a "strong buy" while the other carries a "sell." 


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