UPDATE: Goldman Sachs Upgrades Rock-Tenn Company to Buy, Raises PT

In a report published Friday, Goldman Sachs Group upgraded its rating on Rock-Tenn Company

from Neutral to Buy, and raised its price target from $56.00 to $83.00. Goldman Sachs noted, “Our 12-month $83 price target is based on our FY2013 EBITDA estimate and 6.3X multiple, which reflects RKT's 5-year average one-year forward EV/EBITDA multiple upwardly revised by 0.25X given we think the stock could see modest multiple expansion if containerboard prices move higher in a flat demand environment (i.e. this shows improved industry pricing power). We previously used RKT's 5-year average multiple of 6.0X based on our 2013 estimates, RKT trades at 5.4X EV/EBITDA vs. its historical 5-year average of 6.0X. RKT also trades at a 9% FY2013 FCF yield.” Rock-Tenn Company closed on Thursday at $68.26.