UPDATE: D.A. Davidson Upgrades EMCOR Group as Recovering Nonresidential Environment is Expected to Boost Growth

In a report published Thursday, D.A. Davidson & Co. analyst John B. Rogers upgraded the rating on

from Neutral to Buy, and reiterated the $45.00 price target. In the report, D.A. Davidson & Co. noted, “Following a sharp decline in nonresidential construction activity between 2009 and 2011, spending on commercial/industrial projects has not meaningfully rebounded, in notable contrast to past construction cycles. Underinvestment and recent improvements in demand within select markets are now increasing support for new spending initiatives on commercial and industrial nonresidential investment. As shown in Diagram I, the ABI index of advance billing demand has historically led organic growth for EMCOR by a year. A recent upturn in the index provides a positive early indicator of building activity. Notably there is some risk that the recent government shutdown could slow some project planning over the near-term, although we suspect a slowing would be temporary.” EMCOR Group closed on Wednesday at $36.78.