Manitowoc Shares Lifted by Lehman Brothers Analyst Upgrade (2005-10-13)
An upgrade by Lehman Brothers boosted shares of crane and shipbuilder Manitowoc Co. Wednesday, after an analyst forecast a rebound in the company\’s crane market.
In a note to clients, analyst Joel G. Tiss raised the stock\’s rating to "Overweight" from "Equal Weight" and raised its price target to $60 from $47.
"Recent hurricanes, a declining end market for the past 5-plus years and very low inventories at the rental channel level should allow the North American crane end markets to snap back strongly over the next few years," he wrote.
The stock, up about 29 percent since the start of the year, gained $2.32, or 4.8 percent, to $50.42 in afternoon trading on the New York Stock Exchange. Earlier Wednesday, its shares traded 32 cents shy of last week\’s 12-month high of $51.49. The stock traded at a 52-week low of $32.50 last October.
Manitowoc holds a leading market position in the crane manufacturing industry, where a positive cycle "looks like it\’s just beginning to get started," Tiss said. The company\’s operating margins — at 16.6 percent during the last cyclical peak — now stand near 6 percent. The analyst forecast a return to operating margins of 10 percent or more.
"The major reason that we are increasing our estimates and raising our rating on Manitowoc is that we now believe the margin potential of the company\’s Crane segment is higher than we had previously modeled," he wrote.
The analyst raised his earnings per share estimates to $3.50 from $3.25 for 2006, and to $4.75 from $4.25 for 2007, while introducing a new peak of $5.50 per share for 2008. Analysts polled by Thomson Financial expect the company to earn $3.44 and $4.54 per share for 2006 and 2007, respectively.
On the shipbuilding side, Manitowoc is predicting a turnaround during this year\’s second half. Underperforming contracts have largely trailed off, Tiss said.
Manitowoc also manufactures ice-makers, drink-dispensers and other refrigeration products.
(from:yahoo)
