UPDATE: Bank of America Downgrades Rexnord Corp. to Underperform, Reiterates $29 PT as Stock Approaches Price Objective

In a report published Wednesday, Bank of America analyst Andrew Obin downgraded the rating on

from Neutral to Underperform, but reiterated the $29.00 price target. In the report, Bank of America noted, “As RXN approaches our $29 PO, we downgrade the stock to Underperform. Based on our EPS and EBITDA estimates, RXN is trading in line with its peer set, which we view as appropriate given its slower earnings growth in CY15 and limited balance sheet optionality. Although RXN will likely benefit from the recovery in the residential and non-resi markets, we see more risk than upside at the current trading level and see limited multiple expansion from here, which is supported by our SOTP analysis. RXN has outperformed the broader industrial sector since its debt refinancing in August ‘13 (up ~50% v. XLI up ~20%). Our downgrade is reflective of the relative attractiveness of RXN within our coverage cluster.” Rexnord Corp. closed on Tuesday at $28.24.