UPDATE: Goldman Sachs Downgrades MeadWestvaco to Neutral On SBS Pricing Outlook
Goldman Sachs reduced its rating on MeadWestvaco (NYSE: MWV) from Buy to Neutral and lowered its price target from $33 to $30.
Goldman Sachs commented, "We downgrade MeadWestvaco (MWV) to Neutral, as we have lowered our bleached board (SBS) price forecast and EPS estimates for MWV, and now our 2013 MWV EPS estimates are 3% below consensus. We have lowered our SBS price forecasts to reflect the recent market trend, declining backlog levels, and significant capacity coming on line in Asia. While we continue to like MWV's strong balance sheet and dividend yield and see solid upside to the stock's sum-of-the-parts valuation, we are now Neutral rated on shares, as the shares trade at 7.1X our 2013 EBITDA estimates vs. the five- year average of 6.5X.
MeadWestvaco closed at $31.20 on Thursday.
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