OSK: Bearish Signal Confirmed - Time for Puts?

Oshkosh Corporation designs, develops, and manufactures purpose-built vehicles and equipment. The company operates through three segments: Access, Vocational, and Defense. The Access segment offers access and material handling equipment under the 'JLG' and 'SkyTrak' brands, and towing and recovery equipment under the 'Jerr-Dan' brand, targeting equipment rental companies, construction contractors, and home improvement centers. The Vocational segment provides fire apparatus ('Pierce' and 'Maxi-Metal'), airport ground support equipment ('AeroTech'), aircraft rescue and firefighting vehicles ('Oshkosh Airport Products'), refuse and recycling collection vehicles ('McNeilus'), field service vehicles ('IMT'), command vehicles ('Frontline Communications'), and concrete mixer vehicles ('Oshkosh S-Series'), serving municipal and commercial customers. The Defense segment, operating under the 'Oshkosh Defense' brand, supplies tactical vehicles and mobility systems to the U.S. Department of Defense and approved foreign customers, and also produces the 'Next Generation Delivery Vehicle (NGDV)' for the U.S. Postal Service. Oshkosh differentiates itself through strong market positions, diversified product portfolios, quality products, innovative solutions, and flexible manufacturing.

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OSK's technical outlook is bearish. The recent price action shows a sharp decline from approximately $144 in late August to around $120 as of November 4th. The price is below its 21-day EMA, which is currently at 131.07, and the 50-day SMA, which is at 133.93, confirming a downtrend. The 200-day SMA, while present, is not a factor since the price is far below at 113.49. Momentum indicators also support this bearish view. The MACD is negative and diverging further below its signal line, with MACDh at -1.526, signaling increasing downward momentum. The RSI is at 35.52, indicating oversold conditions, but in a strong downtrend, oversold conditions can persist. The STOCHk is at 9.52, and STOCHd is at 16.97, suggesting the stock is oversold and could bounce, but the overall trend is down. The ADX is at 18.75 indicating the trend is not strong and could consolidate. Recent prices show a significant drop, with the stock failing to hold above $125, indicating strong selling pressure. Given these factors, OSK is likely to continue its downward trajectory over the next 1-3 months.

The company's MD&A reveals a mixed performance. For the third quarter of 2025, `Net sales` decreased by 1.9% to $2,688.6 million compared to $2,741.4 million in the third quarter of 2024. The consolidated `Gross income` margin decreased by 100 bps, from 18.5% to 17.5%. For the first nine months of 2025, operating activities provided $183.3 million of cash, a significant increase compared to using $240.7 million of cash during the first nine months of 2024. Looking ahead, the company has revised its 2025 diluted earnings per share guidance to between $9.75 and $10.25, on sales between $10.3 billion and $10.4 billion, down from previous estimates of approximately $10.25 earnings per share on sales of approximately $10.6 billion. This revision reflects 'weaker market conditions' in the Access segment and 'higher warranty costs' in the Transport segment. The company's backlog at September 30, 2025 decreased 4.4% to $13.7 billion compared to $14.3 billion at September 30, 2024, with a significant decrease in the Access segment backlog of 66.2% to $721 million, attributed to 'slowing demand' and 'normalization of orders'. The company expects cash flow from operations to be between $650 million and $750 million in 2025.

Oshkosh Corporation's Q2 2025 earnings call projects a moderately bullish outlook, supported by solid performance and increased guidance. The company reported adjusted EPS of $3.41, a 2.1% increase year-over-year, and an adjusted operating margin of 11.5%. Management highlighted strong performance across all segments. Although consolidated sales were down 4%, this was offset by improved pricing and higher Vocational sales. Encouragingly, the company is increasing its full-year adjusted EPS guidance to '$11 per share on revenues of approximately $10.6 billion,' matching pre-tariff expectations, and raising free cash flow guidance from '$300 million to $400 million to a range of $400 million to $500 million.' The Transport segment shows promise, with increasing revenue from delivery vehicles. Management seems confident, stating that 'we are well positioned to grow revenue and transform our margins between now and 2028, and the building blocks to deliver on this growth are evident in this quarter's results,' indicating a positive trajectory for the company.

OSK's financial performance presents a generally stable picture with elements of both positive and negative trends. Revenue has fluctuated, starting at $2543.8M in Q1 2024, peaking at $2846.9M in Q2 2024, and ending at $2688.6B in Q3 2025. The gross profit ratio has remained relatively consistent, ranging from 0.172 to 0.192, indicating stable profitability. Operating cash flow has been highly variable, swinging from negative $355.8M in Q1 2024 to a positive $790.8M in Q4 2024, before settling at $489M in Q3 2025. Total debt has increased significantly from $772.5M in Q4 2023 to $1206.4M in Q3 2025, suggesting increased leverage. While revenue shows some growth and gross margins are stable, the inconsistent operating cash flow and increasing debt levels warrant careful monitoring. The company's ability to manage its working capital and capital expenditures will be crucial in maintaining financial stability over the next 12 months.

The company presents a moderately bullish investment profile based on its key metrics and financial ratios. Revenue has shown positive growth, indicating a healthy demand for its products or services. The gross margin has remained relatively stable, suggesting efficient cost management. The Return on Equity (ROE) indicates a solid return for shareholders. The Price-to-Earnings (P/E) ratio suggests the company is appropriately valued by the market. The debt-to-equity ratio has seen a decrease, showcasing the company's improved financial leverage. The current ratio signifies the company's strong ability to meet its short-term obligations. Overall, the company demonstrates a stable and growing business model with a healthy balance sheet, making it a moderately attractive investment for the next 6-12 months.