What Happened?
Shares of electrical and electronic products company Hubbell (NYSE: HUBB) jumped 3.9% in the afternoon session after the company reported third-quarter results that beat profit expectations and raised its full-year forecast, helping investors look past a slight miss on revenue. Hubbell's adjusted earnings per share came in at $5.17, which was higher than analysts had expected. However, its total revenue of $1.5 billion for the quarter was slightly below consensus estimates. Initially, the stock traded lower following the announcement. Despite the revenue shortfall, the company increased its adjusted earnings per share guidance for the full year to $18.20 at the midpoint. The positive earnings and improved forecast appeared to win over investors, reversing the initial dip.
After the initial pop the shares cooled down to $450.96, up 3.9% from previous close.
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What Is The Market Telling Us
Hubbell’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 14 days ago when the stock gained 3% on the news that Bernstein SocGen Group reiterated its "Outperform" rating on the stock. The investment firm maintained its $511 price target, expressing confidence that the company would achieve its second-half growth targets. Bernstein's optimistic view was supported by several factors, including an expected price increase as tariff-related pricing took effect and anticipated growth in grid infrastructure. The firm also noted that Hubbell's grid automation business appeared to have bottomed out, while non-residential activity showed early signs of accelerating. Adding to the positive sentiment, Hubbell was viewed as a key company supplying products needed to upgrade the nation's electrical grid to meet the rising power demands from data centers and Artificial Intelligence.
Hubbell is up 7.4% since the beginning of the year, and at $450.96 per share, it is trading close to its 52-week high of $472.12 from November 2024. Investors who bought $1,000 worth of Hubbell’s shares 5 years ago would now be looking at an investment worth $3,126.
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