Is this U.S.-China selloff a buy? A top Wall Street voice weighs in
In a challenging economic climate, Otter Tail Corporation (NASDAQ:OTTR) stock has touched a 52-week low, dipping to $71.98. According to InvestingPro analysis, this price point suggests the stock may be undervalued, with the company maintaining strong fundamentals and a GREAT financial health score. This latest price level reflects a notable downturn in the company's market performance over the past year. Investors have been closely monitoring Otter Tail, a diversified company with operations ranging from electric utilities to manufacturing, as it navigates through the headwinds of market volatility. While the stock has declined over the past year, InvestingPro data reveals the company's strong dividend track record, having maintained payments for 54 consecutive years with 11 years of consecutive raises. The company's attractive P/E ratio of 9.92 and positive analyst revisions suggest potential value opportunity. This recent low serves as a critical point of reference for shareholders and potential investors as they assess the company's resilience and future growth potential. For deeper insights, access the comprehensive Pro Research Report available on InvestingPro, covering what really matters about OTTR through expert analysis and intuitive visuals.
In other recent news, Otter Tail Corporation has seen some significant developments. The company has secured two amended and restated credit agreements, providing Otter Tail and its subsidiary, Otter Tail Power Company, with revolving credit facilities. The Otter Tail Credit Agreement, led by U.S. Bank National Association, offers a $170 million unsecured revolving credit line, potentially expandable to $290 million. Similarly, the subsidiary's credit agreement provides a $220 million unsecured revolving credit facility, which could increase to $300 million.
In terms of earnings, Otter Tail reported a 7% decrease in diluted earnings per share (EPS) to $2.03 for the third quarter of 2024, compared to the same period last year. Despite this, the company's year-to-date earnings have increased by 4%. The earnings varied across segments, with a 16% increase in the Electric segment, an 8% drop in the Plastics segment, and a significant 71% decrease in the Manufacturing segment.
These recent developments led the company to adjust its EPS guidance for 2024, reflecting confidence in the performance of the Plastics segment. Otter Tail has also reaffirmed its commitment to defending against ongoing class action lawsuits. The firm remains focused on its strategic plan, emphasizing renewable generation and transmission investments, and expects a net income of $45 million to $50 million from the PVC segment by 2026 or later.
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