UPDATE: Deutsche Bank Upgrades The Valspar Corporation to Buy, Raises PT as Valuation Discount is Too Large

In a report published Friday, Deutsche Bank analyst David Begleiter upgraded the rating on

from Hold to Buy, and raised the price target from $72.00 to $75.00. In the report, Deutsche Bank noted, “With Valspar shares down 8% since disappointing FQ4 guidance on August 13 vs a 3% increase in PPG, Valspar's P/E multiple discount to PPG has widened to 3x vs a historical avg of 0.6x. We believe this discount is too wide. While the uniqueness of Valspar's portfolio (China/Australia architectural, heavy machinery levered to mining/construction) is causing divergence vs PPG, with 55% of Valspar's sales US-based, China improving and strategic initiatives in Paints poised to drive strong growth in '14, we believe Valspar's performance vs PPG will normalize over the next 6-12 months. As this occurs, we believe the valuation gap vs PPG will narrow. We thus upgrade Valspar to Buy.” The Valspar Corporation closed on Thursday at $65.04.