“After a 3Q EPS season where growth stabilization remains scarce,
Ritchie noted that several aspects of the shares are underappreciated, especially the Power Solutions business given its dominant market and high-teens EBIT margins versus peers’ low-teens margins.
“Three-fourths of our LDD segment EBIT CAGR is fueled by synergies from the TYC merger, so better organic incrementals could drive upside,” Ritchie noted.
The analyst estimates the company’s targeted $900 million of cost savings has a PV of about $0.65-$0.70/share.
However, Ritchie cut his FY 2017 EPS view to $2.70 from $2.80 to reflect potential stranded costs from the combination, but maintained his FY 2018/2019 EPS estimates of $3.15/$3.60.
Ritchie maintained his price target of $46.
|Nov 2016||Goldman Sachs||Maintains||Buy|
|Oct 2016||Goldman Sachs||Initiates Coverage On||Buy|
|Oct 2016||Baird||Initiates Coverage On||Outperform|
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