10 Best Manufacturing Stocks To Buy According to Analysts

2. The Middleby Corporation (NASDAQ:MIDD)

Number of Hedge Fund Investors  in Q1 2024: 28

Average Analyst Share Price Upside: 28%

Average Analyst Share Price Target: $164.17

The Middleby Corporation (NASDAQ:MIDD) is a specialty industrial equipment company that caters to the needs of the food and food services industry. Its high exposure to the food industry means that The Middleby Corporation (NASDAQ:MIDD)’s stock is relatively easy to evaluate. Food services is a highly cyclical industry, and the industrial nature of the firm’s products allows for insight into its future sales performance. Analysts are on the watch out for consistent order backlog strength, and the general health of the food industry to determine The Middleby Corporation (NASDAQ:MIDD)’s stock future performance. Right now, the stock’s forward P/E ratio is 12.89, which follows an 11.85% year to date share price drop. This comes amidst a broader slowdown within both of The Middleby Corporation (NASDAQ:MIDD)’s commercial and residential business divisions.

During its Q1 2024 earnings call, The Middleby Corporation (NASDAQ:MIDD)’s management shared that its backlogs are low also partly due to improved lead times as it shared:

“I mean I think as we see order improvement as we go through the year. So I think we’ve — backlog has come down as we had a lot of backlog I’d say orders that were pulled ahead. We’ve kind of gone I’ll say maybe to a certain extent the other way where inventory is not only at normalized levels, but a lot of our partners are slow to place orders because they know lead times are short. They don’t want to carry inventory and our channel partners, they see kind of their end users a lot of the projects are geared towards the half of the year. So, they’re not going to buy the product right now. They’re going to buy closer to execution. So when we started the year, January was pretty slow, not unexpectedly for a whole variety of reasons some of it even weather-driven.

That we saw progressively improve as we went through the first quarter and then it’s improved a fair bit more as we’ve kind of gone into the early part of the second quarter. So that kind of lines up with a lot of the commentary that we get from our channel partners along with the discussions that we have with our chain customers. So I think a lot of the view and the confidence we have is based on kind of the transparent discussions that we have with them including what they see as the outlook, where the inventory is in the channel and then kind of line that up with the order trends that we’ve had, as we progress through the first four months of the year.”