BB&T Analyst: Manitowoc Worth $34 Per Share In Breakup

Manitowoc Company MTW rose sharply Monday after Carl Icahn disclosed a 7.77 percent stake and said he wants to split its construction crane and food service equipment units into two separate companies.

In light of Icahn's disclosure, BB&T's C. Schon Williams upgraded Manitowoc Monday to Buy from Hold and set a $26 price target.

Manitowoc closed up nearly 9 percent at $22.79. Year-to-date, shares are off about 2.3 percent.

Icahn's filing follows a move in June by Relational Investors that disclosed an 8.52 percent stake and also sought a split of the company.

Icahn, who said he may also seek board representation, indicated he hasn't held talks so far with the company.

Manitowoc acquired the food-service equipment business six years ago for $2.7 billion in a move to shield its results from business cycles in the construction industry.

BB&T's Williams said his breakup valuation estimate includes possible spending cutbacks by Manitowoc customers in the oil and gas sector and could create 2016 headwinds for the company's crane segment.

Third-quarter 2014 net sales in the food-service segment were $417.1 million, up 3.8 percent from $401.9 million a year earlier.

In the same period, Crane segment fell to $569.2 million, from $610.2 million a year earlier. The decline was most pronounced in the boom truck and rough-terrain product categories.