(By Balachander) IDEX Corp. (NYSE: IEX) shares were downgraded to "hold" from "buy" by Brean Capital based on valuation.
"With the shares now trading above 15x our 2013 EPS estimate of $3.00 and our $45 target price, we consider them fairly valued," the brokerage said. "We believe our forecasts are appropriate given the specific end market conditions for the company's products, and we are unwilling to raise our estimates at this time."
In addition, Brean Capital wrote that it is unwilling to raise its multiple assumptions for valuation purposes, given the slow growth macroeconomic environment in the United States and lethargic market conditions in Europe.
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"We remain bullish on the longer term prospects for the company, but will await a more favorable valuation before once again recommending investors accumulate shares," the brokerage wrote in a note.
Although the company continues to push forward with efficiency improvements and balance sheet management initiatives, Brean Capital views that organic growth will continue to be challenging,
"We don't believe forecasted GDP growth across IDEX's various end markets offer any incremental opportunities to revisit our assumptions," the brokerage said.
IDEX is an applied solutions company specializing in fluid and metering technologies, health and science technologies, and fire, safety and other diversified products.
On Wednesday, shares dropped 1.02 percent to trade at $45.51.