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UPDATE: Brean Capital Reiterates On ARC Group WorldWide On Greater Confidence

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In a report published Friday, Brean Capital analyst Ananda Baruah reiterated a Buy rating on ARC Group WorldWide (NASDAQ: ARCW), and raised the price target from $23.00 to $30.00.

In the report, Brean Capital noted, “We reiterate our Buy-rating and are raising our TP to $30 (from $23 TP), as ARCW's instant online quoting initiative gives us greater confidence in our long-standing thesis of $55M in EBITDA for CY'16. Although the initiative is in its preliminary stages (currently in ‘beta' phase for Plastics customers in 3DMT), we believe ARCW is well on its way to propagating this to its entire product portfolio (MIM, 3DMT, Stamping, etc..) – a la Protolabs'(PRLB, Not-Rated), online quoting system which has been a significant contributor to success of PRLB's growth over the last few years. We continue to view ARCW as a quickly powerfully developing and differentiated way to invest in the use of advanced technologies impacting traditional fabrication of metal and plastic production parts in traditional manufacturing. Our $30 TP (58% appreciation) reflects a 10x EV/EBITDA - using our framework for CY'16 EBITDA of $55M (Figure 1). However, we believe ARCW could ultimately trade at a minimum of ~10x-11x EV/EBITDA, given that the stock is currently trading at ~15x Street '15 EBITDA, while we believe Street EBITDA remains low.”

ARC Group WorldWide closed on Thursday at $19.04.

Latest Ratings for ARCW

DateFirmActionFromTo
Apr 2015Brean CapitalMaintainsBuy
Nov 2014Imperial CapitalMaintainsOutperform
Oct 2014Canaccord GenuityDowngradesBuyHold

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Posted-In: Ananda Baruah Brean CapitalAnalyst Color Price Target Analyst Ratings

 

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