logo
  Join        Login             Stock Quote

Cooper Industries (CBE) PT Lifted To $75 By Oppenheimer, 'Outperform' Maintained

 April 03, 2012 03:53 PM
 


Oppenheimer & Co. analyst Christopher Glynn raised his price target on shares of Cooper Industries Plc (NYSE:CBE) to $75 from $70, while maintaining "Outperform" rating.

While investment in global growth initiatives, coupled with some temporary operating issues around a production consolidation and some procurement & delivery issues, negatively impacted the second half of 2011 margins, Glynn believes that growth investments are already supporting top-line results and operating leverage is well poised to recover to about 25% incremental margins.

Noting the company-specific sequential drivers and improved leading nonresidential data, the analyst anticipates CBE has further runway on multiple expansion to track more in line with some mid-cap electrical equipment peers, with initial guidance looking increasingly in a high comfort zone.

[Related -Eaton (ETN) Closes Purchase of Cooper Industries (CBE)]

Updated Q1 outlook (from late February investor day) suggested trends supported the high end of Q1 guidance for $0.97 to $1.01 EPS on broad-based revenue performance across the portfolio (and inclusive of about 4 cents charge, previously not anticipated).

With 40% of revenues outside the US and half that in emerging markets, Glynn noted CBE's growth investment last year was building off a substantive base of operations, and in his view, lending to reasonably quick impact on the revenue opportunity.

Significant investment targeted (among other areas like Power Systems) the global oil & gas vertical (currently about 2/3 outside U.S.), with further buildout of global management, sales, and marketing, and a focus on other CBE businesses tangential to core O&G (Crouse-Hinds) targeting key regions and customers.

[Related -Illinois Tool Works (ITW) Dividend Stock Analysis 2012]

Census Bureau data for non-residential spending improved mid-teens year-to-date through February, and with public leveling off (at least for now, after a 10% decline), total non-residential spending improved 6.5%, indicating macro inflection potentially at hand.

The analyst also noted continued balance sheet opportunity, with 2011 ending with nearly $700 million cash on hand, net debt at about 0.8 times 2011 EBITDA, and expected 2012 free cash flow of about $700 million.

The brokerage increased its 2012 EPS estimate to $4.35 from $4.25 and its 2013 estimate to $4.90 from $4.80.

CBE is trading down 0.16% at $63.96 on Tuesday.

iOnTheMarket Premium
Advertisement

Advertisement


Post Comment -- Login is required to post message
Name:  
Alert for new comments:
Your email:
Your Website:
Title:
Comments:
 

rss feed

Latest Stories

article imageIntegrated Device Technology Inc. (IDTI) Q1 Earnings Preview: Another Beat and Pop?

Integrated Device Technology Inc. (NASDAQ:IDTI) will issue first quarter 2015 financial results on July 28, read on...

article imageHerbalife Ltd. (NYSE:HLF) Q2 Earnings Preview: The Potential To Shock?

Herbalife Ltd. (NYSE:HLF) will release its second quarter 2014 financial results after the close of trading read on...

article imageHealth Net, Inc. (HNT): Potential to Be Huge Winners Says Bank of America

As of this keystroke, Health Net, Inc. (NYSE: HNT) shares are up around 4% on the day. The managed health read on...

article imageHomeAway, Inc. (AWAY) Q2 Earnings Preview: Top and Bottom Line Bullish Surprise?

HomeAway, Inc. (NASDAQ:AWAY) will report its financial results for the second quarter ended June 30, 2014 read on...

Advertisement
Popular Articles

Advertisement
Daily Sector Scan
Partner Center



Fundamental data is provided by Zacks Investment Research, and Commentary, news and Press Releases provided by YellowBrix and Quotemedia.
All information provided "as is" for informational purposes only, not intended for trading purposes or advice. iStockAnalyst.com is not an investment adviser and does not provide, endorse or review any information or data contained herein.
The blog articles are opinions by respective blogger. By using this site you are agreeing to terms and conditions posted on respective bloggers' website.
The postings/comments on the site may or may not be from reliable sources. Neither iStockAnalyst nor any of its independent providers is liable for any informational errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. You are solely responsible for the investment decisions made by you and the consequences resulting therefrom. By accessing the iStockAnalyst.com site, you agree not to redistribute the information found therein.
The sector scan is based on 15-30 minutes delayed data. The Pattern scan is based on EOD data.