Federal Signal (NYSE:FSS) 주식

Federal Signal

Federal Signal Corp designs and manufactures products and integrated solutions for municipal, governmental, industrial, and airport customers. It operates in the segments of Environmental Solutions Group and the Safety and Security Systems Group. The Environmental Solutions group manufactures and supplies street sweeper vehicles, sewer cleaner and vacuum loader trucks, hydro-excavation trucks, high-performance water blasting equipment, dump truck bodies, and trailers. The Safety and Security Systems Group offers comprehensive systems and products such as campus and community alerting, emergency vehicles, first responder interoperable communications, and others. The company generates a majority of its revenue from the Environmental Solutions Group segment.

Federal Signal Corp

Fossal SAA ADR

Fossal SAA

Fision Corp

Fidelity Sustainable U.S. Equity ETF

Raymond James analyst Tim Thein maintains Federal Signal (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FSS#NYSE">FSS</a>) with a Outperform and lowers the price target from $105 to $100.

News

Price Target

Analyst Ratings

Raymond James Maintains Outperform on Federal Signal, Lowers Price Target to $100

Disclosed in a recent SEC filing on April 9, Sherman, President &amp; CEO at Federal Signal (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FSS#NYSE">FSS</a>), made a noteworthy transaction involving the exercise of company stock options.
What Happened: A Form 4 filing with the <a href="https://www.sec.gov/Archives/edgar/data/0000277509/000192323325000026//Archives/edgar/data/277509/000192323325000026/0001923233-25-000026-index.htm">U.S. Securities and Exchange Commission</a> on Wednesday revealed that Sherman, President &amp; CEO at Federal Signal in the Industrials sector, exercised stock options for 12,935 shares of FSS stock. The exercise price of the options was $16.09 per share.
The Thursday morning market activity shows Federal Signal shares down by 0.0%, trading at $76.59. This implies a total value of $782,567 for Sherman's 12,935 shares.
<h3>Unveiling the Story Behind Federal Signal</h3>
Federal Signal Corp designs and manufactures products and integrated solutions for municipal, governmental, industrial, and airport customers. It operates in the segments of Environmental Solutions Group and the Safety and Security Systems Group. The Environmental Solutions group manufactures and supplies street sweeper vehicles, sewer cleaner and vacuum loader trucks, hydro-excavation trucks, high-performance water blasting equipment, dump truck bodies, and trailers. The Safety and Security Systems Group offers comprehensive systems and products such as campus and community alerting, emergency vehicles, first responder interoperable communications, and others. The company generates a majority of its revenue from the Environmental Solutions Group segment.
<h3>Key Indicators: Federal Signal's Financial Health</h3>
Revenue Growth: Federal Signal's remarkable performance in 3 months is evident. As of 31 December, 2024, the company achieved an impressive revenue growth rate of 5.26%. This signifies a substantial increase in the company's top-line earnings. As compared to competitors, the company surpassed expectations with a growth rate higher than the average among peers in the Industrials sector.
Key Insights into Profitability Metrics:
<ul>
<li>
Gross Margin: The company maintains a high gross margin of 28.09%, indicating strong cost management and profitability compared to its peers.
</li>
<li>
Earnings per Share (EPS): With an EPS below industry norms, Federal Signal exhibits below-average bottom-line performance with a current EPS of 0.82.
</li>
</ul>
Debt Management: With a below-average debt-to-equity ratio of 0.21, Federal Signal adopts a prudent financial strategy, indicating a balanced approach to debt management.
Market Valuation:
<ul>
<li>
Price to Earnings (P/E) Ratio: Federal Signal's current Price to Earnings (P/E) ratio of 21.88 is higher than the industry average, indicating that the stock may be overvalued according to market sentiment.
</li>
<li>
Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 2.54, Federal Signal's stock is perceived as being overvalued in the market, particularly in relation to sales performance.
</li>
<li>
EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation &amp; Amortization): With an impressive EV/EBITDA ratio of 14.17, Federal Signal demonstrates exemplary market valuation, surpassing industry averages.
</li>
</ul>
Market Capitalization Analysis: Falling below industry benchmarks, the company's market capitalization reflects a reduced size compared to peers. This positioning may be influenced by factors such as growth expectations or operational capacity.
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<h3>Unmasking the Significance of Insider Transactions</h3>
In the complex landscape of investment decisions, investors should approach insider transactions as part of a comprehensive analysis, considering various elements.
Within the legal framework, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities as per Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.
However, insider sells may not always signal a bearish view and can be influenced by various factors.
<h3>Important Transaction Codes</h3>
When dissecting transactions, the focal point for <a href="https://www.benzinga.com/money/investing-tools">investors</a> is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
<a href="https://www.benzinga.com/sec/insider-trades/search/index?company_cik=0000277509">Check Out The Full List Of Federal Signal's Insider Trades.</a>
Insider Buying Alert: Profit from C-Suite Moves
Benzinga Edge reveals every insider trade in real-time. Don't miss the next big stock move driven by insider confidence. Unlock this ultimate sentiment indicator now. <a href="https://www.benzinga.com/premium/ideas/benzinga-edge-checkout/?t=Be8be9arja3be22in8&amp;adType=benzinga-insights&amp;ad=analyst-ratings&amp;campaign=wallstreetadvantage">Click here for access</a>.
This article was generated by Benzinga's automated content engine and reviewed by an editor.

Short Sellers

Insider Trades

Trading Ideas

Insider Move: Jennifer L Sherman Exercises Options, Realizing $782K At Federal Signal

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Shares of machinery companies are trading higher following President Trump's decision to implement a 90-day pause on reciprocal tariffs for all countries except China.

On March 3, a substantial insider purchase was made by Jennifer L Sherman, President &amp; CEO at Federal Signal (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FSS#NYSE">FSS</a>), as per the latest SEC filing.
What Happened: A Form 4 filing with the <a href="https://www.sec.gov/Archives/edgar/data/0000277509/000192323325000015//Archives/edgar/data/277509/000192323325000015/0001923233-25-000015-index.htm">U.S. Securities and Exchange Commission</a> on Monday unveiled that Sherman made a notable purchase of 1,250 shares of Federal Signal, valuing at $102,899.
Tracking the Monday's morning session, Federal Signal shares are trading at $81.27, showing a down of 0.01%.
<h3>Discovering Federal Signal: A Closer Look</h3>
Federal Signal Corp designs and manufactures products and integrated solutions for municipal, governmental, industrial, and airport customers. It operates in the segments of Environmental Solutions Group and the Safety and Security Systems Group. The Environmental Solutions group manufactures and supplies street sweeper vehicles, sewer cleaner and vacuum loader trucks, hydro-excavation trucks, high-performance water blasting equipment, dump truck bodies, and trailers. The Safety and Security Systems Group offers comprehensive systems and products such as campus and community alerting, emergency vehicles, first responder interoperable communications, and others. The company generates a majority of its revenue from the Environmental Solutions Group segment.
<h3>Financial Insights: Federal Signal</h3>
Revenue Growth: Over the 3 months period, Federal Signal showcased positive performance, achieving a revenue growth rate of 5.26% as of 31 December, 2024. This reflects a substantial increase in the company's top-line earnings. As compared to its peers, the company achieved a growth rate higher than the average among peers in Industrials sector.
Holistic Profitability Examination:
<ul>
<li>
Gross Margin: The company sets a benchmark with a high gross margin of 28.09%, reflecting superior cost management and profitability compared to its peers.
</li>
<li>
Earnings per Share (EPS): Federal Signal's EPS lags behind the industry average, indicating concerns and potential challenges with a current EPS of 0.82.
</li>
</ul>
Debt Management: Federal Signal's debt-to-equity ratio is below the industry average at 0.21, reflecting a lower dependency on debt financing and a more conservative financial approach.
Analyzing Market Valuation:
<ul>
<li>
Price to Earnings (P/E) Ratio: A higher-than-average P/E ratio of 23.22 suggests caution, as the stock may be overvalued in the eyes of investors.
</li>
<li>
Price to Sales (P/S) Ratio: A higher-than-average P/S ratio of 2.69 suggests overvaluation in the eyes of investors, considering sales performance.
</li>
<li>
EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation &amp; Amortization): With an EV/EBITDA ratio of 15.01, the company's market valuation exceeds industry averages.
</li>
</ul>
Market Capitalization Analysis: Reflecting a smaller scale, the company's market capitalization is positioned below industry averages. This could be attributed to factors such as growth expectations or operational capacity.
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<h3>Exploring the Significance of Insider Trading</h3>
Emphasizing the importance of a comprehensive approach, considering insider transactions is valuable, but it's crucial to evaluate them in conjunction with other investment factors.
In the realm of legality, an "insider" is defined as any officer, director, or beneficial owner holding more than ten percent of a company's equity securities under Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are required to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
Notably, when a company insider makes a new purchase, it is considered an indicator of their positive expectations for the stock.
Conversely, insider sells may not necessarily signal a bearish stance on the stock and can be motivated by various factors.
<h3>Cracking Transaction Codes</h3>
When dissecting transactions, the focal point for <a href="https://www.benzinga.com/money/investing-tools">investors</a> is often those occurring in the open market, meticulously detailed in Table I of the Form 4 filing. A P in Box 3 denotes a purchase, while S signifies a sale. Transaction code C indicates the conversion of an option, and transaction code A denotes a grant, award, or other acquisition of securities from the company.
<a href="https://www.benzinga.com/sec/insider-trades/search/index?company_cik=0000277509">Check Out The Full List Of Federal Signal's Insider Trades.</a>
Insider Buying Alert: Profit from C-Suite Moves
Benzinga Edge reveals every insider trade in real-time. Don't miss the next big stock move driven by insider confidence. Unlock this ultimate sentiment indicator now. <a href="https://www.benzinga.com/premium/ideas/benzinga-edge-checkout/?t=Be8be9arja3be22in8&amp;adType=benzinga-insights&amp;ad=analyst-ratings&amp;campaign=wallstreetadvantage">Click here for access</a>.
This article was generated by Benzinga's automated content engine and reviewed by an editor.

Noteworthy Insider Activity: Jennifer L Sherman Invests $102K In Federal Signal Stock

Federal Signal shares are trading lower following mixed Q4 earnings.

Guidance

Federal Signal Sees FY25 Adj. EPS $3.60-$3.90 Vs $3.74 Estimate; Sees Net Sales $2.02B-$2.1B Vs $2.004B Estimate

Federal Signal (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FSS#NYSE">FSS</a>) reported quarterly earnings of $0.87 per share which met the analyst consensus estimate. This is a 17.57 percent increase over earnings of $0.74 per share from the same period last year. The company reported quarterly sales of $472.00 million which missed the analyst consensus estimate of $481.90 million by 2.05 percent. This is a 5.26 percent increase over sales of $448.40 million the same period last year.

Earnings

Earnings Misses

Federal Signal Q4 2024 GAAP EPS $0.87, Inline, Sales $472.00M Miss $481.90M Estimate

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Core Scientific, Inc. - Class A Common Stock

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Earnings Scheduled For February 26, 2025

The Board of Directors of Federal Signal Corporation (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FSS#NYSE">FSS</a>) declared a quarterly cash dividend of fourteen cents ($0.14) per share on its common stock. This represents an increase of $0.02 per share, or 17%, compared to the dividend declared in the prior quarter. The dividend is payable on March 27, 2025 to stockholders of record at the close of business on March 14, 2025.

Dividends

Federal Signal Corporation Increases Quarterly Dividend From $0.12 To $0.14 Per Share

Raymond James analyst Tim Thein reinstates Federal Signal (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FSS#NYSE">FSS</a>) with a Outperform and announces $110 price target.

Initiation

Raymond James Reinstates Outperform on Federal Signal, Announces $110 Price Target

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Shares of machinery companies are trading higher. Investors may be reacting to the US presidential election and its impact on the industry.

DA Davidson analyst Michael Shlisky maintains Federal Signal (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FSS#NYSE">FSS</a>) with a Neutral and lowers the price target from $94 to $90.

DA Davidson Maintains Neutral on Federal Signal, Lowers Price Target to $90

Federal Signal On Thursday Raised Full-Year Adj. EPS Outlook From $3.20-$3.35 To $3.30-$3.40, Narrowed Full-Year Net Sales Outlook  From $1.85B-$1.90B To $1.86B-$1.88B

Federal Signal (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FSS#NYSE">FSS</a>) reported quarterly earnings of $0.88 per share which beat the analyst consensus estimate of $0.84 by 4.76 percent. The company reported quarterly sales of $474.200 million which missed the analyst consensus estimate of $481.665 million by 100.00 percent. This is a 100.00 percent decrease over sales of $446.400 million the same period last year.

Earnings Beats

Federal Signal Q3 2024 Adj. EPS $0.88 Beats $0.84 Estimate, Sales $474.200M Miss $481.665M Estimate

Federal Signal (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FSS#NYSE">FSS</a>) is gearing up to announce its quarterly earnings on Thursday, 2024-10-31. Here's a quick overview of what investors should know before the release.
Analysts are estimating that Federal Signal will report an earnings per share (EPS) of $0.84.
The market awaits Federal Signal's announcement, with hopes high for news of surpassing estimates and providing upbeat guidance for the next quarter.
It's important for new investors to understand that guidance can be a significant driver of stock prices.
<h3>Historical Earnings Performance</h3>
In the previous earnings release, the company beat EPS by $0.11, leading to a 3.03% increase in the share price the following trading session.
Here's a look at Federal Signal's past performance and the resulting price change:

<table>
<thead>
<tr>
<th>Quarter</th>
<th>Q2 2024</th>
<th>Q1 2024</th>
<th>Q4 2023</th>
<th>Q3 2023</th>
</tr>
</thead>
<tbody>
<tr>
<td>EPS Estimate</td>
<td>0.84</td>
<td>0.56</td>
<td>0.66</td>
<td>0.66</td>
</tr>
<tr>
<td>EPS Actual</td>
<td>0.95</td>
<td>0.64</td>
<td>0.74</td>
<td>0.71</td>
</tr>
<tr>
<td>Price Change %</td>
<td>3.0%</td>
<td>-1.0%</td>
<td>-2.0%</td>
<td>2.0%</td>
</tr>
</tbody>
</table>

<img src="https://www.benzinga.com/files/images/story/2024/1730311481_0.png" alt="eps graph" />
<a href="https://www.benzinga.com/quote/FSS/earnings">To track all earnings releases for Federal Signal visit their earnings calendar on our site.</a>
This article was generated by Benzinga's automated content engine and reviewed by an editor.

Insights Ahead: Federal Signal's Quarterly Earnings

3M Company MMM is scheduled to release <a href="https://www.zacks.com/stock/research/MMM/earnings-calendar?icid=quote-stock_overview-quote_nav_tracking-zcom-left_subnav_quote_navbar-earnings_dates_announcements">third-quarter</a> 2024 results on Oct. 22, before market open. 
The Zacks Consensus Estimate for earnings is pegged at $1.93 per share, reflecting an increase of 0.5% in the past 60 days. The consensus mark implies a 28% decline from the year-ago reported actuals. The Zacks Consensus Estimate for revenues is pegged at $6.1 billion, indicating a 26.6% decrease year over year.
<h3>Estimate Movement</h3>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/1b/81718.jpg?v=527876902" style="height:167px; width:624px" /> 
Image Source: Zacks Investment Research
It is worth noting that in April 2024, 3M completed the spin-off of its Health Care business into a separate public company. Notably, the spin-off is likely to have weighed on MMM&#39;s year-over-year top-line comparison in the quarter.
Despite the unfavorable impacts of the Health Care spin-off, the company&#39;s third-quarter performance is likely to have benefited from strength across its end markets, channel inventory normalization, solid operational execution and cost-saving initiatives. 
3M has an impressive earnings surprise history. The company&#39;s earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 12.6%. In the last reported quarter, it delivered an earnings surprise of 16.3%.
<h2>3M&#39;s Earnings Surprise History</h2>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/9b/81719.jpg?v=1627260871" style="height:145px; width:624px" /> 
Image Source: Zacks Investment Research
<h3>Earnings Whispers</h3>
Our proven model predicts an earnings beat for 3M this time around. The combination of a positive <a href="https://www.zacks.com/earnings/earnings-surprise-predictions/">Earnings ESP</a> and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. 
Earnings ESP: MMM has an Earnings ESP of +1.81% as the Most Accurate Estimate is pegged at $1.97 per share, which is higher than the Zacks Consensus Estimate of $1.93. You can uncover the best stocks before they&#39;re reported with our <a href="https://www.zacks.com/premium/esp-buy?adid=zp_article_espfilter&amp;icid=zpi_article_espfilter">Earnings ESP Filter</a>. 
Zacks Rank: 3M presently carries a Zacks Rank of 3. You can see <a href="https://www.zacks.com/stocks/buy-list/?ADID=zp_1link&amp;ICID=zpi%20_1link">the complete list of today&#39;s Zacks #1 Rank stocks here</a>.
<div class="chart_embed">
<h3>3M Company Price and EPS Surprise</h3>
<a href="https://www.zacks.com/stock/chart/MMM/price-eps-surprise?icid=chart-MMM-price-eps-surprise"><img alt="3M Company Price and EPS Surprise" src="https://staticx-tuner.zacks.com/images/charts/16/1729257407.png" style="height:302px; width:624px" title="" /> </a>
<a href="https://www.zacks.com/stock/chart/MMM/price-eps-surprise?icid=chart-MMM-price-eps-surprise">3M Company price-eps-surprise</a> | <a href="https://www.zacks.com/stock/quote/MMM?icid=chart-MMM-price-eps-surprise">3M Company Quote</a>
</div>
<h3>Factors Shaping Quarterly Performance</h3>
Strength in electronics, automotive, aerospace, commercial branding and transportation end markets is expected to have augmented the Transportation and Electronics segment&#39;s revenues in the third quarter. Continued channel inventory normalization, supported by strong growth in electronics demand, is likely to have driven its performance. Also, solid demand for its products in the automotive electrification market, supported by an increase in auto OEM (original equipment manufacturer) build rates, might have been a tailwind for the segment. 
Improvement in demand across end markets is anticipated to have been a tailwind for 3M&#39;s industrial adhesives &amp; tapes, personal safety and automotive aftermarket businesses under the Safety and Industrial segment. However, weakness across the abrasives and industrial specialties markets is likely to have been a spoilsport. The Zacks Consensus Estimate for Safety and Industrial segment revenues is pegged at $2.79 billion, indicating a 1.4% increase from the year-ago number. 
The company is expected to have benefited from its restructuring actions, including headcount reduction, which are likely to have reduced costs and improved margins in the quarter. Its restructuring savings and spending discipline are also likely to have boosted its margins and profitability. 
Despite the positives, weakness in 3M&#39;s packaging and expression as well as home and auto care businesses is likely to have dragged its performance. Lower consumer retail discretionary spending on hardline goods is likely to hurt its Consumer segment&#39;s results. The consensus mark for the Consumer segment&#39;s revenues is pegged at $1.31 billion, indicating a 0.8% decline from the year-ago number. 
Given the company&#39;s extensive geographic presence, its operations are subject to foreign exchange headwinds. A stronger U.S. dollar is also likely to have hurt 3M&#39;s overseas business.
<h3>Price Performance &amp; Valuation</h3>
MMM&#39;s shares have exhibited an uptrend in the past three months, outperforming its peers and the Zacks <a href="https://www.zacks.com/stocks/industry-rank/industry/diversified-operations-48">Diversified Operations</a> industry. The conglomerate giant&#39;s shares have surged 30.6%, outperforming the industry&#39;s and the S&amp;P 500&#39;s growth of 1.8% and 5.6%, respectively. The company&#39;s peers Honeywell International Inc. HON and Federal Signal Corporation FSS have gained 2.3% and 2.4%, respectively, in the same period.
<h2>MMM Outperforms Industry, S&amp;P 500 &amp; Peers</h2>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/68/81720.jpg?v=857223673" style="height:294px; width:624px" /> 
Image Source: Zacks Investment Research
In terms of valuation, MMM&#39;s forward 12-month price-to-earnings (P/E) is 17.55X, a premium to its industry average of 16.17X. This indicates that investors will be paying a higher price than the company&#39;s expected earnings growth compared with its peers. Also, the stock is overvalued compared with its peer, Griffon Corporation GFF, which is trading at 11.88X.
<h2>Price-to-Earnings (Forward 12 Months)</h2>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/03/81722.jpg?v=1727293138" style="height:230px; width:624px" /> 
Image Source: Zacks Investment Research
<h3>Investment Thesis</h3>
3M&#39;s robust and diversified portfolio encompassing industrial abrasives, automotive components, electrical products and packaging materials, along with strength in its segments, is likely to drive its growth. The company&#39;s ongoing restructuring actions are expected to improve margins and cash flow in the long run. It expects these actions to be completed by 2025 and yield annual pre-tax savings. Also, its commitment to rewarding its shareholders handsomely through dividend payments and share buybacks adds to its strength. 
However, weakness in the packaging and expression as well as home and auto care businesses remains concerning for its near-term performance. The company has been subject to several litigations, including earplug lawsuits. It has committed substantial funds to resolve these disputes as ongoing litigation might lead to additional expenses.
Also, a high debt level, if not controlled, is likely to be a drag on 3M&#39;s profitability. Exiting the second-quarter 2024, the company&#39;s long-term debt was high at $11.8 billion. This is evident from its long-term debt-to-capital ratio compared with its industry.
<h2>MMM&#39;s Long-Term Debt-to-Capital</h2>
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/fb/81723.jpg?v=1244707954" style="height:259px; width:624px" /> 
Image Source: Zacks Investment Research
<h3>Should You Buy 3M Stock Now?</h3>
Investors interested in 3M stock should wait for a better entry point, considering its premium valuation and the challenges it is facing in the retail market. Also, a <a href="https://www.zacks.com/style-scores-education/">VGM Score</a> of D does not reflect major strength in the stock. 
One should monitor the stock&#39;s developments closely before buying it, as an erroneous and hasty decision could affect portfolio gains. Therefore, it might be prudent to wait for MMM&#39;s earnings report before making an investment decision. 
However, those who already own this stock may stay invested as the company&#39;s upbeat estimates, strong share price returns and strength across most end markets offer solid long-term prospects.
<a href="https://www.zacks.com/stock/news/2353219/should-3m-stock-be-part-of-your-portfolio-ahead-of-q3-earnings?cid=CS-BENZ-FT-analyst_blog|most_popular_stocks-2353219">To read this article on Zacks.com click here.</a>
<a href="https://www.zacks.com/">Zacks Investment Research</a>

General

Should 3M Stock Be Part Of Your Portfolio Ahead Of Q3 Earnings?

Honeywell International Inc. (NASDAQ: <a class="ticker" href="https://www.benzinga.com/stock/hon#NASDAQ">HON</a>) is experiencing strength in its commercial aviation aftermarket business driven by solid demand in the air transport and business aviation markets. Also, strength in the company&#39;s commercial aviation original equipment business, backed by an improvement in build rates and an increase in air transport hours, has been favorable.
In the quarters ahead, it expects the Aerospace segment to benefit from strong demand in commercial aviation, growth in air transport flight hours and higher chipset deliveries. Strength in its defense and space business, owing to stable U.S. and international defense spending volumes and sustained demand from the current geopolitical climate, is also likely to be beneficial.
Solid demand for its products and solutions, led by increasing building projects, will likely be beneficial for the Building Automation segment. Strength in the advanced materials business, driven by higher demand for fluorine products, bodes well for the Energy and Sustainability Solutions segment.
The company has been strengthening its business through acquisitions. Acquisitions had a positive impact of 1% on sales growth in the second quarter. In July 2024, it inked a deal to acquire Air Products&#39; liquefied natural gas process technology and equipment business for $1.81 billion in cash. Subject to regulatory approvals and customary closing conditions, the acquisition is expected to close before the end of 2024.
In June 2024, Honeywell inked a deal to acquire CAES Systems Holdings LLC from private equity firm Advent. The transaction will augment its defense technology offerings across various domains, including land, sea, air and space. Subject to regulatory approvals and customary closing conditions, the acquisition is expected to close by the second half of 2024. In the same month, Honeywell acquired Carrier&#39;s Global Access Solutions business for an all-cash deal of $4.95 billion. The inclusion of Global Access Solutions&#39; expertise in advanced access and security solutions, coupled with its impressive growth and margin profile, will enable Honeywell to expand its security products portfolio and boost its building automation segment.
The company inked a deal to purchase Civitanavi Systems S.p.A. for about &euro;200 million ($217 million) to boost its portfolio of aerospace navigation solutions in March 2024. With the buyout, Honeywell expects to strengthen its foothold in the European Union. Management expects the transaction to be completed in third-quarter 2024, subject to the fulfillment of certain customary closing conditions.
In August 2023, the company acquired SCADAfence, a provider of operational technology (OT) and Internet of Things cybersecurity solutions. The acquisition will expand Honeywell&#39;s OT cybersecurity portfolio in Tel Aviv, Israel, while simultaneously fortifying its existing capabilities in cybersecurity, thus offering customers enhanced security, reliability and efficiency. SCADAfence has been integrated into the Honeywell Forge Cybersecurity+ suite within Honeywell Connected Enterprise.
Honeywell remains committed to rewarding its shareholders handsomely through dividend payments and share buybacks. In September 2023, HON hiked its quarterly dividend by approximately 5% to $1.08 per share (annually&nbsp;$4.32). This marks its 14th consecutive dividend hike since 2010. In the first six months of 2024, it paid out dividends of $1.4 billion and repurchased shares worth $1.2 billion. Strong free cash flow generation supports the company&#39;s shareholder-friendly activities. Honeywell expects free cash flow to be in the range of $5.5-$5.9 billion for 2024.
In the past year, this Zacks Rank #3 (Hold) company&#39;s shares gained 8.1% compared with the industry&#39;s 17.6% growth.
<img alt="Zacks Investment Research" src="https://staticx-tuner.zacks.com/images/articles/charts/c5/74934.jpg?v=101758204" />
Image Source: Zacks Investment Research
However, Honeywell has been witnessing weakness in the Industrial Automation segment. Weakness in the warehouse and workflow solutions businesses, due to lower demand for projects, has been affecting the segment&#39;s performance. Also, the weakened demand for personal protective equipment within the sensing and safety technologies business is worrisome. Continued softness in the warehouse automation business, owing to lower investments in the market, remains a concern for the segment.
Honeywell&#39;s long-term debt in the last five years (2019-2023) witnessed a CAGR of 8.3%. At the end of the second quarter, the company&#39;s long-term debt was $20.9 billion, higher than $16.6 billion at 2023-end. The increase in its debt level was primarily attributable to the funds raised for the Global Access Solutions acquisition. Considering its high debt level, its cash and cash equivalents of $9.6 billion do not look impressive.
Honeywell stock looks more leveraged than the industry. Its debt/capital ratio is currently 0.61, higher than 0.32 of the industry.&nbsp; Also, interest expenses and other financial charges in the second quarter remained high at $250 million. Exiting the second quarter, its long-term debt and current maturities totaled $23.4 billion. High debt levels can increase its financial obligations and prove detrimental to profitability in the quarters ahead.
<h3>Stocks to Consider</h3>
Some better-ranked companies are discussed below.
3M Company (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/mmm#NYSE">MMM</a>) currently carries a Zacks Rank #2 (Buy).
MMM delivered a trailing four-quarter average earnings surprise of 12.6%. In the past 60 days, the Zacks Consensus Estimate for 3M&#39;s 2024 earnings has increased 1.6%.
Federal Signal Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/fss#NYSE">FSS</a>) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 12.3%.
In the past 60 days, the consensus estimate for FSS&#39;s 2024 earnings has increased 5.2%.
Unisys Corporation (NYSE: <a class="ticker" href="https://www.benzinga.com/stock/uis#NYSE">UIS</a>) currently sports a Zacks Rank of 1. UIS delivered a trailing four-quarter average earnings surprise of 87.7%.
In the past 60 days, the Zacks Consensus Estimate for Unisys&#39; 2024 earnings has increased more than 100%.
<a href="https://www.zacks.com/stock/news/2325262/honeywell-hon-boasts-strong-prospects-despite-headwinds?cid=CS-BENZ-FT-analyst_blog|zer_report_update-2325262">To read this article on Zacks.com click here.</a>

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Honeywell Boasts Strong Prospects Despite Headwinds

Federal Signal Reaffirms FY24 Sales Outlook Of $1.85B - $1.90B Vs. $1.87B Est.

Federal Signal Raises FY24 Adj EPS Outlook From $2.95 - $3.15 To $3.20 - $3.35 Vs. $3.03 Est.

Federal Signal (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/FSS#NYSE">FSS</a>) reported quarterly earnings of $0.95 per share which beat the analyst consensus estimate of $0.84 by 13.1 percent. This is a 41.79 percent increase over earnings of $0.67 per share from the same period last year. The company reported quarterly sales of $490.40 million which beat the analyst consensus estimate of $486.19 million by 0.87 percent. This is a 10.85 percent increase over sales of $442.40 million the same period last year.

Federal Signal Q2 Adj $0.95 Beats $0.84 Estimate, Sales $490.40M Beat $486.19M Estimate

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Federal Signal Completes Acquisition of Standard Equipment Company

Federal Signal to Host Third Quarter Earnings Conference Call on October 31, 2024

Federal Signal Corporation Declares Dividend of $0.12 per share

Federal Signal to Present at Baird's 2024 Global Industrials Conference

Federal Signal Reports Third Quarter Results Including 6% Organic Net Sales Growth and Double-Digit Earnings Improvement; Raises Full-Year Earnings Outlook and EBITDA Margin Targets for Safety and Security Systems Group

Federal Signal Completes Acquisition of Hog Technologies, A Leading U.S. Manufacturer of Road-Marking, Line-Removal and Waterblasting Equipment

Federal Signal to Host Fourth Quarter Earnings Conference Call on February 26, 2025

Federal Signal Corporation Increases Quarterly Dividend by 17%

Federal Signal Completes Record Year with Fourth Quarter Results including 5% Net Sales Growth, 11% Operating Income Increase, and Strong Cash Generation; Issues 2025 Outlook

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