UPDATE: Stifel Nicolaus Downgrades Amphenol to Hold on Fair Valuation
In a report published Wednesday, Stifel Nicolaus analyst Matthew Sheerin downgraded the rating on Amphenol (NYSE: APH) from Buy to Hold, but reiterated the $80.00 price target.
In the report, Stifel Nicolaus noted, “We are lowering our investment rating on shares of Amphenol from Buy to Hold. We see the connector supplier, arguably the best run company in our coverage universe, well positioned to continue to outgrow its peer group through technological leadership and a diversified customer base. Shares have appreciated 25% YTD vs. up 17% for the S&P 500. That said, we now see shares fairly valued, near peak multiples, trading at 18.8x our FY14 EPS estimate of $4.32 (vs. Street of $4.27), above its five-year forward multiple of 15.5x, and at 12.2x our FY14 EV/EBITDA, above its average of 9.75x. Although we could see a modest beat-and-raise over the next two quarters, we do not see any meaningful upward earnings revision in sight (barring a significant M&A transaction). Indeed, we continue to see a very mixed picture on the demand front, as evidenced last night by tepid earnings forecasts from storage OEM NetApp and semiconductor supplier Analog Devices. We also note that our forward estimates reflect peak margins. As such, we find it difficult to raise our $80 price-target based on further multiple expansion and move to the sidelines. We remove our $80 price target.”
Amphenol closed on Tuesday at 81.00.
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