UPDATE: Deutsche Bank Raises PT on The Valspar Corporation on Fair Valuation
In a report published Wednesday, Deutsche Bank reiterated its Hold rating on The Valspar Corporation (NYSE: VAL), and raised its price target from $64.00 to $68.00.
Deutsche Bank noted, “FQ1 misses, '13 guidance lowered on weak int'l demand. Valuation fair at 17x. Valspar shares fell 7% following a disappointing FQ1 release as EPS missed by $0.10 (adjusted for a lower than expected tax rate), or 15% and the midpoint of '13 EPS guidance was lowered by $0.05 or 1%. While the drivers of the earnings miss and lowered guidance (weak China and Australia demand) are likely to persist thru at least FQ2, we believe these issues are macro in nature and do not reflect any structural or operating issues at Valspar. Rather, we continue to believe Valspar is executing at a high level as evidenced by nearly 10% volume growth in its Wood Coatings business. However, with valuation a fair 16.7x ‘13E EPS (vs 21.1 x for SHW and 17.6x for PPG), we maintain Hold.”
The Valspar Corporation closed on Tuesday at $61.94.
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.