Credit Suisse Increases Industrial Expectations

Credit Suisse has decided that some of the gains in the industrial segment are not over. Republic Services Group (NYSE: RSG) is rated Outperform and its target was raised to $38 from $34, while Waste Management Inc. (NYSE: WM) was maintained a Neutral but its price target was lifted to $38 from $35. Credit Suisse maintained Neutral ratings but raised targets as follows: JB Hunt Transport Services (NASDAQ: JBHT) target raised to $68 from $61 and Oshkosh Corporation (NYSE: OSK) saw its target lifted to $38 from $37. Teekay Corporation (NYSE: TK) was maintained Neutral but the commentary was positive.

The comments on each are as follows:

  • Waste Management Inc. (NYSE: WM) “Raising target price based on a 7.5x multiple on our normalized EBITDA estimate of $3.6 billion. Our 7.5x multiple is a slight discount to what the sector trades in a normalized environment given choppy execution. raised target to $38 from $35.”
  • Republic Services (NYSE: RSG) “Raising TP based on an 8x multiple on our normalized EBITDA estimate of $2.6 billion; raising target to $38 from $34.”
  • JB Hunt Transport Services (NASDAQ: JBHT) “reported 4Q12 EPS of $0.70. The company noted that it intends to focus on developing the LTL mode. That should put further pressure on revenue per load, but LTL freight carries higher margins. Our O.R. forecast in this division was largely unchanged.”
  • Oshkosh Corporation (NYSE: OSK) “reported F1Q13 EPS of $0.60 (vs cons $0.31) and management raised its 2013 EPS to $2.80-$3.05. While expectations were low for Oshkosh going into the print, execution was solid, driving increased confidence in the company’s ability to hit its longer-term 2015 EPS targets.”
  • Teekay Corporation (NYSE: TK) “remains well positioned to expand into both the LNG and Offshore Energy sectors. While Teekay has had its hands full with the construction of the FPSO Knarr nearing completion (early 2014) and the repair/upgrade of the FPSO Banff (restarting in Q4 2013) we expect Teekay to return to making project investments in the next few quarters.”

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