J.P Morgan Raises ITs PT On General Cable To $44
February 10, 2011 11:12 AM
General Cable's (NYSE: BGC) Q4 EPS was extraordinarily strong, half driven by operations as General Cable secured better pricing and demonstrated better cost containment than anticipated on relatively in-line metal pound shipments. The other half of EPS upside was due to unusually favorable below-the-line items including forex and noncontrolling interest.
Q1 guidance was slightly disappointing as General Cable does not anticipate price increases to keep pace with the inflationary environment for copper and aluminum given low 65-75% industry utilization levels. While J.P Morgan continues to see rebounding transmission and distribution cable demand and may have underestimated construction demand based on Q4 results.
J.P Morgan is maintaining its Neutral rating as it believes the valuation may already reflect a
substantial improvement in value-add capture which may prove challenging under the current pricing environment. JPM has a $44 PT on BGC.
BGC is trading higher at $43.06
