UPDATE: Deutsche Bank Initiates Coverage on Norcraft Companies with Hold Rating, $18.50 PT as Valuation Reflects Growth Potential

In a report published Monday, Deutsche Bank analyst Nishu Sood initiates coverage on Norcraft Companies NCFT with a Hold rating and $18.50 price target. In the report, Deutsche Bank noted, “The dealer channel for cabinetry is fragmented and difficult to penetrate for cabinet manufacturers; however, it is also generally more stable and profitable. Norcraft has built its business around the dealer channel and as a result its performance through the downturn has been better than peers. Looking ahead, we expect Norcraft to benefit from new housing (30% exposure) and remodeling (70% exposure) recovery and to achieve solid profit growth in the next few years. Based on EBITDA multiples against 2015 numbers this growth already appears to be priced in so we initiate with a Hold rating.” Norcraft Companies closed on Friday at $17.70.