UPDATE: Deutsche Bank Raises PT to $50 on Valspar
Deutsche Bank increases its price target on Valspar (NYSE: VAL) from $48 to $50 and reiterates its Hold rating on shares following a share pullback despite good quarterly results.
Deutsche Bank notes, "Valspar shares fell 7% despite a FQ2 beat and the raising of FY '12 guidance ($3.20-$3.30 vs cons of $3.18). We believe the weakness is partially attributable to management citing inventory de-stocking by a North American Paint customer during the quarter and an overall volume decline of 2% (albeit due to an exit from low margin Coatings products). While volumes are likely to increase sequentially in Q3, with raw material inflation poised to rise mid-high single digits, the price/raw material gap not fully closed (raws ~90% recovered) and valuation a fair 14.3x '12E EPS, we maintain our Hold."
VAL closed at $46.46 on Tuesday.
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