UPDATE: Goldman Sachs Resumes Coverage on IHS Awaiting Greater Confidence in Growth Sustainability
In a report published Friday, Goldman Sachs analyst Andre Benjamin resumed coverage on IHS (NYSE: IHS) with a Neutral rating and $120.00 price target.
In the report, Goldman Sachs noted, “We resume coverage of IHS with a Neutral rating and a $120, 12-month, EV/EBITDA-based target price for 4% total return, in line with the 4% average upside for the group. We view IHS as one of the most favorably positioned companies under coverage, with scale hard to replicate across the verticals it serves, high switching costs, a high recurring revenue base, and attractive growth. However, while IHS has shown it is very strong driving growth via M&A, given its premium valuation we believe greater confidence in the sustainability of double-digit organic EBITDA growth is needed for shares to outperform. Organic growth averaged 6% from 2008-2012. Street concern with IHS's organic growth is the reason it has lagged the S&P 500 by 3% YTD.”
IHS closed on Thursday at $71.31.
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