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 (NYSE: RKT) from Neutral to Conviction List 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.
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