UPDATE: Topeka Upgrades Polypore International to Buy Rating on Upcoming Demand Inflection
In a report released on Thursday, Topeka Capital Markets analyst Chris Kapsch upgraded his rating on Polypore International, Inc. (NYSE: PPO) from Hold to Buy rating and raised the price target from $37.00 to $46.00.
In the report, Kapsch wrote, "PPO will remain controversial, with bulls/bears debating the ultimate EDV adoption curve slope/rate, and the specter of increasing competition creating an occasional cloud of uncertainty. But with PPO down 18% since our January downgrade, with 1Q13 expectations sufficiently low, with an improving likelihood that an EDV-driven demand inflection may be imminently forthcoming, and considering the stock's still-substantial 34% short interest, we suddenly see more reasons to be bullish again. When the ultimate positive demand inflection -- that we have been expecting to drive operating leverage, as well as PPO's multiple -- is abundantly obvious, it will likely be too late to chase the stock. Hence, our upgrade to Buy now. A more modest valuation also helps support our renewed favorable view, with PPO trading at just 14X our 2014 EPS projection on a P/E basis. Note also, with curtailed cap-ex, PPO will be generating meaningful FCF starting this year."
Polypore International closed Wednesday at $40.25.
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