UPDATE: Goldman Sachs Upgrades Rockwood Holdings to Buy on Valuation
Goldman Sachs raised its rating on Rockwood Holdings (NYSE: ROC) from Neutral to Buy while reiterating its $53 price target.
Goldman Sachs commented, "We upgrade ROC to Buy from Neutral as we believe the current valuation excessively discounts ROC's exposure to European end markets and its TiO2 segment. While these headwinds have driven consensus 2012 EPS estimates down 9% YTD, they have also shifted the earnings mix in favor of ROC's high-growth and less cyclical Lithium and Advanced Ceramics businesses, which we expect will represent 52% of the earning mix in 2013, versus only 9% for TiO2. Our forecasts do not incorporate ROC's proposed acquisition of Talison announced August 23, 2012, which would further favorably improve the earnings mix towards Lithium."
Rockwood Holdings closed at $43.90 on Monday.
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