Manitowoc Inc.’s (MTW) crane segment, which forms the backbone of its entire business, has been delivering poor results since 2009, due to lower demands in the U.S. and European markets.
This offset the strong results in the foodservice segment during the third quarter, which is expected to continue into the fourth quarter. The company’s debt position is stagnant at $2 billion. Furthermore, it failed to generate sufficient cash flow during the quarter, in order to pay off the debt.
Moreover, due to weaker-than expected order trends, the company’s chances of a swift recovery are very bleak. Based on the above reasons, we have downgraded Manitowoc from Neutral to Underperform with a target price of $12.00.