BWS Financial Reaffirms Buy Rating for Hawkins (NASDAQ:HWKN)

Key Points

• BWS Financial reaffirmed its Buy rating on Hawkins and maintained a $200 price target, implying approximately 30% upside from the prior close.
• Hawkins reported quarterly results above expectations, with EPS of $1.34 versus $1.19 expected and revenue of $313.8 million versus $302.7 million forecast. The company also raised its quarterly dividend by 5.3% to $0.20 per share.
• Analyst sentiment remains mixed: Hawkins has an average rating of Hold and a consensus price target of $170.50, while the stock trades near 40 times earnings following a sharp rally.

Hawkins (NASDAQ:HWKN - Get Free Report)'s stock had its "buy" rating reissued by BWS Financial in a note issued to investors on Tuesday, Benzinga reports. They currently have a $200.00 target price on the specialty chemicals company's stock. BWS Financial's price objective would suggest a potential upside of 30.00% from the company's previous close.

A number of other analysts also recently weighed in on the stock. Zacks Research downgraded shares of Hawkins from a "hold" rating to a "strong sell" rating in a report on Tuesday, August 4th. Barclays set a $141.00 price objective on shares of Hawkins and gave the stock an "equal weight" rating in a research note on Tuesday, October 13th. Finally, Weiss Ratings upgraded Hawkins from a "hold (c)" rating to a "hold (c+)" rating in a research note on Monday, September 21st. One equities research analyst has rated the stock with a Buy rating, two have assigned a Hold rating and one has given a Sell rating to the company's stock. According to MarketBeat.com, Hawkins presently has an average rating of "Hold" and a consensus target price of $170.50.

Hawkins Price Performance

Shares of HWKN stock traded up $18.41 on Tuesday, hitting $153.85. 423,982 shares of the stock traded hands, compared to its average volume of 164,109. The company has a debt-to-equity ratio of 0.45, a current ratio of 2.27 and a quick ratio of 1.54. The firm has a market cap of $3.21 billion, a price-to-earnings ratio of 39.86, a PEG ratio of 2.71 and a beta of 0.74. The firm has a 50 day simple moving average of $126.44 and a two-hundred day simple moving average of $143.14. Hawkins has a 52 week low of $116.04 and a 52 week high of $174.12.

Hawkins (NASDAQ:HWKN - Get Free Report) last announced its quarterly earnings results on Monday, October 26th. The specialty chemicals company reported $1.34 earnings per share (EPS) for the quarter, beating analysts' consensus estimates of $1.19 by $0.15. The company had revenue of $313.82 million for the quarter, compared to the consensus estimate of $302.70 million. Hawkins had a net margin of 7.29% and a return on equity of 15.42%. As a group, equities research analysts predict that Hawkins will post 4.07 earnings per share for the current fiscal year.

Insider Activity

In other Hawkins news, VP Douglas Lange purchased 910 shares of the firm's stock in a transaction dated Tuesday, August 25th. The shares were purchased at an average cost of $118.75 per share, with a total value of $108,062.50. Following the completion of the purchase, the vice president owned 28,169 shares in the company, valued at approximately $3,345,068.75. This represents a 3.34% increase in their position. The acquisition was disclosed in a document filed with the SEC, which is available through this link. Also, CFO Jeffrey Oldenkamp bought 1,290 shares of Hawkins stock in a transaction on Thursday, August 27th. The shares were purchased at an average cost of $119.00 per share, for a total transaction of $153,510.00. Following the completion of the purchase, the chief financial officer directly owned 104,223 shares of the company's stock, valued at $12,402,537. This trade represents a 1.25% increase in their ownership of the stock. The SEC filing for this purchase provides additional information. Company insiders own 3.70% of the company's stock.

Institutional Inflows and Outflows

Several institutional investors and hedge funds have recently added to or reduced their stakes in HWKN. BlackRock Inc. purchased a new stake in shares of Hawkins during the 2nd quarter worth approximately $449,055,000. William Blair Investment Management LLC acquired a new stake in Hawkins in the second quarter valued at about $27,212,000. London Co. of Virginia acquired a new position in shares of Hawkins during the 1st quarter worth $26,791,000. Bank of New York Mellon Corp acquired a new position in shares of Hawkins during the 2nd quarter worth $20,071,000. Finally, Giverny Capital Inc. acquired a new position in shares of Hawkins during the 2nd quarter worth $13,493,000. Institutional investors and hedge funds own 69.71% of the company's stock.

Key Hawkins News

Here are the key news stories impacting Hawkins this week:

• Positive Sentiment: Strong earnings and revenue beat: Fiscal Q2 revenue reached $313.8 million, up 11.9% year over year and above the approximately $302.7 million analyst estimate. Adjusted earnings of $1.34 per share exceeded consensus estimates ranging from $1.19 to $1.22 and increased from $1.08 a year earlier. Hawkins fiscal Q2 results
• Positive Sentiment: Improved profitability and cash generation: Gross profit rose to $76.6 million, operating profit reached $41.9 million, and net income attributable to common shareholders increased to $27.8 million. Operating cash flow was $40.3 million, while total liabilities declined, supporting the view that the earnings growth was accompanied by solid financial quality. Hawkins Q2 earnings analysis
• Positive Sentiment: Dividend increased: Hawkins declared a quarterly dividend of $0.20 per share, payable November 25 to shareholders of record November 11. The payment represents a 5.3% increase from $0.19 and an annualized dividend of $0.80, signaling continued confidence in cash flows. Hawkins dividend announcement
• Neutral Sentiment: Investor takeaway: The results triggered a sharp post-earnings rally, with trading volume above average. However, Hawkins trades at a relatively elevated valuation—approximately 40 times earnings—so continued share-price gains may depend on sustaining its earnings and margin momentum.

About Hawkins

Hawkins, Inc NASDAQ: HWKN is a chemical manufacturer, blender and distributor serving customers across the United States. The company supplies a range of water treatment chemicals, industrial chemicals and specialty products to municipal, commercial and industrial users.

Its water treatment business provides chemicals and related solutions used in drinking water, wastewater and industrial water treatment applications. Hawkins also serves the industrial, health and nutrition, and specialty chemical markets, offering products such as chemical blends, custom formulations and other materials used in manufacturing, agriculture, food processing and pharmaceutical applications.

Founded in 1938, Hawkins is headquartered in Roseville, Minnesota, and operates through a network of manufacturing, blending, distribution and sales locations in the United States.