Bear of the Day: Albany International (AIN)

Albany International Corporation engages in the machine clothing and engineered composites businesses. A global textiles and materials processing company, Albany specializes in machine clothing for paper mills and engineered structures for aerospace and other industries.

Key challenges remain for Albany in 2026. Deteriorating returns on capital make it clear that management’s attempts at new investments are destroying value. Sales growth has been anemic in recent years and well below other industrial companies. A difficult macroeconomic environment and lingering inflationary conditions do not bode well for the company’s outlook.

As we’ll see, revenues are expected to decline in the current fiscal year. With the stock trading at over 19 times forward earnings, the lack of growth potential simply doesn’t warrant a bullish stance.

The Zacks Rundown

A Zacks Rank #5 (Strong Sell) stock, Albany International AIN is a component of the Zacks Textile – Products industry group, which currently ranks in the bottom 4% out of approximately 250 Zacks Ranked Industries. As such, we expect this industry group as a whole to underperform the market over the next 3 to 6 months, just as it has throughout the past year:

Stocks in the bottom tiers of industries can often be intriguing short candidates. While individual stocks have the ability to outperform even when they’re part of a lagging industry, the inclusion in a weaker group serves as a headwind for any potential rallies and the journey forward is that much more difficult.

Albany’s stock widely underperformed the market over the past year. A recent uptick into February presents a compelling short opportunity.

History of Earnings Misses & Deteriorating Outlook

Albany missed the earnings mark in two of the past four quarters. The company delivered a trailing four-quarter average earnings miss of -1.35%. Falling short of earnings estimates is a recipe for underperformance, and AIN is no exception.

The textiles company has been on the receiving end of negative earnings estimate revisions as of late. Looking into fiscal 2026, analysts cut estimates by -1.0% in the past 60 days. The Zacks Consensus EPS Estimate is now $2.96 per share. Revenues are anticipated to decline -7.5% this year to $1.05 billion.

Falling earnings estimates are a huge red flag and need to be respected. Negative growth year-over-year is the type of trend that bears like to see.

Technical Outlook

As illustrated below, AIN stock is in a sustained downtrend. Notice how the stock has been widely underperforming the major indices. Also note that shares are trading below a downward-sloping 200-day (red line) moving average – another good sign for the bears.

AIN stock has experienced what is known as a “death cross,” whereby the stock’s 50-day moving average (blue line) crosses below its 200-day moving average. Shares would have to make an outsized move to the upside and show increasing earnings estimate revisions to warrant taking any long positions. The stock has fallen nearly 30% in the past year alone.

Final Thoughts

A deteriorating fundamental and technical backdrop show that this stock is not set to make its way to new highs anytime soon. The fact that AIN stock is included in one of the worst-performing industry groups adds yet another headwind to a long list of concerns.

A shaky earnings history and falling future earnings estimates will likely serve as a ceiling to any potential rallies, nurturing the stock’s downtrend.

Potential investors may want to give this stock the cold shoulder, or perhaps include it as part of a short or hedge strategy. Bulls will want to steer clear of AIN until the situation shows major signs of improvement.

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This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research