UPDATE: DA Davidson Upgrades Powell Industries to Buy

DA Davidson upgrades Powell Industries (NASDAQ: POWL) to Buy from Neutral and raies its prie target to $42 from $35 a share on earnings and backlog growth.

DA Davidson says, "We are raising our price target to $42 from $35 previously. Our price target reflects 7x our fiscal 2013 EBITDA estimate. We now believe a higher multiple is appropriate due to more clarity regarding the completion of problem projects in Canada, the affirmation of a solid pipeline of opportunities in the oil & gas sector as well as recent improvement in quotation activity in other end markets. We expect a combination of backlog and earnings growth over the next 12-18 months will support a higher multiple for these shares."

POWL closed at $34.24 a share on Wednesday.

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