Bank Of America: The Shaw Group Sells 20% Stake In Westinghouse To Toshiba

Bank of America released a research report on The Shaw Group Inc.

announcing its decision to sell its 20% stake in Westinghouse to Toshiba. In its report, Bank of America writes, “The decision does not come as a surprise and management has previously communicated the likely exit from the investment (see Meeting with Power Group). In our view, the sale would simplify Shaw's balance sheet structure by removing $1.7bn non-recourse debt and would highlight robust ~$1.2bn of net cash (~$16/sh), which should serve as a positive catalyst to the stock's valuation.” Bank of America maintains its Buy rating and its price objective of $31.00. The Shaw Group closed yesterday at $23.53.