Oppenheimer Reiterates Outperform, $38 PT on McGrath RentCorp
Oppenheimer reiterates its rating of Outperform with a $38 price target on McGrath RentCorp (NASDAQ: MGRC) on higher 2011 finish than expected and continued growth expectations.
Oppenheimer says, "MGRC's 4Q11 EPS of $0.53 topped our/consensus' $0.41/$0.43 predominantly on strong rental growth in TRS RenTelco and particularly Adler Tanks. These two segments (3/4th of MGRC's aggregate EPS contribution) grew organic revenue 13%/46%, respectively, while non-California Modulars chipped-in +15% y/y. With California Modulars soft but stabilizing (and just an estimated ~15% of EPS contribution), MGRC's lone blemish is minimal. Although '12 EPS guidance of $2.02-2.12 appears overly conservative, it exceeded $1.99 consensus and, notably, 2011 EPS of $2.00 (+33% y/y) compares to original guidance of $1.52-1.62 (+1% to +8% y/y)."
MGRC closed at $31.75 a share on Wednesday.
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