Stock Information
symbol line chart

FELEFranklin Electric Co., Inc.

Upcoming Earnings

We were not able to find an announced earnings date for this symbol yet. Check back again later

Company Info

CEO

Gregg C. Sengstack

Location

Indiana, USA

Exchange

Nasdaq

Website

https://franklin-electric.com

Summary

Franklin Electric Co.

Company Info

CEO

Gregg C. Sengstack

Location

Indiana, USA

Exchange

Nasdaq

Website

https://franklin-electric.com

Summary

Franklin Electric Co.

AI Insights for FELE
2 min read

Quick Summary

Franklin Electric Co., Inc. is a global leader in the design, manufacturing, and distribution of water and fuel pumping systems. The company operates through three main segments: Water Systems, Fueling Systems, and Distribution. Its clientele includes a range of industries and sectors, notably agriculture, commercial, residential, and industrial markets that require reliable water and fuel delivery solutions. Franklin Electric is headquartered in Indianapolis, Indiana, and has a worldwide presence, serving customers in multiple countries and territories through direct sales, distributors, and contractors. With over 6,500 employees, the firm is committed to providing advanced, energy-efficient pumping technology and smart water solutions.

The Bull Case

  • Franklin Electric's primary strengths include its established market leadership in water and fueling systems, as well as a diversified global presence.
  • The company benefits greatly from its broad product portfolio, which ranges from traditional pumping solutions to advanced smart water technologies.
  • Consistent investments in research and development, supported by a strong acquisition track record, enhance its innovation capability.
  • Franklin's strong reputation and long-standing customer relationships drive recurring revenue, while robust distribution channels provide global market reach.
  • The firm’s financial stability allows for ongoing investment in product development and strategic expansion.

The Bear Case

  • Key weaknesses for Franklin Electric center around recent margin pressures and operational risks associated with integrating acquired businesses.
  • The company is exposed to volatility in end markets, such as housing and agriculture, which can directly impact product demand.
  • Currency fluctuations and the imposition of tariffs have added additional costs and unpredictability to the company's financial performance.
  • Despite strong long-term growth prospects, inconsistent profitability due to one-time charges and challenging macroeconomic conditions are current vulnerabilities.
  • These factors can make it difficult for Franklin to consistently deliver on market expectations and maintain a premium valuation.

Key Risks

  • Franklin Electric faces numerous risks, including those related to global economic downturns that can dampen construction, agriculture, and industrial activity.
  • Integration risks from recent and future acquisitions may disrupt operations or fail to deliver expected synergies.
  • Persistent supply chain disruptions, raw material cost volatility, and tariff-related expenses can pressure profit margins.
  • Intense competition from large multinational peers with significant R&D budgets poses an ongoing threat.

What to Watch

UpcomingIn the most recent quarter, Franklin Electric achieved record sales, with revenue rising 8% to $587.4 million and EPS increasing to $1.31.
UpcomingGross margin fell slightly to 36.1% due to a notable $59 million one-off charge, though operating income increased by 11%.
UpcomingAll business segments showed growth, and both the Water and Distribution divisions set new records.
ExpectedFor the upcoming quarter, analysts expect Franklin Electric to focus on integrating recent acquisitions like Barnes de Colombia to drive growth in Latin America and enhance its regional product offerings.

Price Drivers

  • Franklin Electric's stock price is influenced by several key factors.
  • Primary drivers include quarterly earnings performance, particularly growth in EPS and revenue across its core segments.
  • Macroeconomic factors, such as fluctuations in housing markets, agricultural demand for irrigation, and currency exchange rates, also play significant roles.
  • Strategic acquisitions and product innovation, especially in smart water and energy systems, contribute to investor sentiment.

Recent News

  • Franklin Electric recently announced a leadership transition, with Joe Ruzynski appointed as CEO and Board member effective July 1, 2024, succeeding longtime leader Gregg Sengstack, who steps into the role of Executive Chairperson.
  • The company reported robust Q2 results, marked by record sales and positive contributions from recent acquisitions, leading to increased dividends and share repurchases.
  • Franklin Electric is acquiring Barnes de Colombia S.A., which will enhance its presence in Latin America.
  • However, the firm did experience lower gross margin due to a significant non-recurring charge but expects recovery going forward.

Market Trends

  • The broader manufacturing-electronics and industrial pumps market is experiencing growth due to stable global demand, technological innovation, and the adoption of digital and energy-efficient solutions.
  • E-commerce growth and the increasing need for sustainable water management, including solar and smart water systems, are notable trends.
  • Supply chain disruptions and tariff burdens remain challenges across the industry.
  • Companies that offer advanced monitoring, automation, and efficient asset use are better positioned for continued success.

AI-generated summary. Not investment advice. DYOR.

Community Research

Research from investors like you

Be the first to share your analysis on FELE

Help fellow investors make informed decisions by sharing your research on fundamentals, catalysts, and outlook.

Topics: Company overview • Products • Competitors • Strengths & Risks

Symbol's posts

No more topics to show