UPDATE: Goldman Sachs Initiates Armstrong World Industries at Neutral on Peaking Incremental Margins
Goldman Sachs initiated coverage on Armstrong World Industries Inc (NYSE: AWI) with a Neutral rating and a $54.00 price target.
Goldman Sachs commented, "Armstrong's end-market exposure is attractive with 70% exposure to commercial construction, which appears to be inflecting, and the remaining 30% predominately tied to US residential repair & remodel. However, incremental margins have peaked as cost-cutting initiatives have ended and SG&A should grow, wood prices are climbing faster than price increases, and start-up costs from its four upcoming new plants will impact results; these occur before Armstrong sees revenue growth from their late cycle products or a Europe turnaround (22% of sales)."
Armstrong World Industries closed at $52.94 on Wednesday.
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