Deutsche Bank Downgrades MSC Industrial Direct

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MSC Industrial Direct Co Inc MSM was downgraded from Hold to Sell by Deutsche Bank with a $73 price target in a report issued Wednesday.

"MSC reported disappointing F4Q14 results. Additionally, the company provided a year-ahead operating margin framework that suggested that if the current moderate growth/weak pricing environment continues, OP margins would be expected to be, on average, 1 point below the 14.4 percent realized this year," according to the report.

Analyst John G. Inch believed the "distributor customer mix and industry pricing pressures are likely to prevail throughout the coming year, and possibly become more acute."

Inch cut his "FY15 EPS forecast estimates from $4.50 to $4.20” and “FY16 EPS forecast estimates...from $5.25 to $4.88."

The report concluded by lowering the price target from $92 to $73, which was derived by applying a mid-teens P/E valuation multiple to the $4.88 EPS estimate in FY 2016.

MSC Industrial Direct Co Inc closed at $84.27 Tuesday, down 0.85 percent.

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Posted In: Analyst ColorDowngradesPrice TargetAnalyst RatingsDeutsche BankJohn G. Inch
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