UPDATE: J.P. Morgan Reiterates Neutral Rating, Raises PT on Worthington Industries on Improving Margin Stability, Growth Opportunities

In a report published Friday, J.P. Morgan analyst Michael F. Gambardella reiterated a Neutral rating on Worthington Industries WOR, and raised the price target from $29.00 to $32.00. In the report, Gambardella noted, “Our increased Dec 2013 price target and earnings estimates reflect Worthington's unique mix of improving margin stability and growth opportunities. Specifically, while core Steel Processing profitability continues migrating away from its historical sensitivity to volatile steel markets, the Cylinders business now represents the company's largest capital investment and primary margin driver via a richer product mix and ongoing operational review. Moreover, the segment appears well positioned to expand margins and its product reach as a market leader in a fragmented business environment. We remain constructive on Worthington's relatively defensive nature and emerging growth opportunities; however, we reiterate our Neutral rating on WOR with a preference for steel companies with greater leverage to a commercial construction recovery with higher dividend yields and more defined growth projects at more attractive valuations.” Worthington Industries closed on Thursday at $29.68.