Baird Is Positive On ABM Industries Into Earnings, Sees Long-Term Growth

Baird reiterated ABM Industries, Inc.

Outperform rating and $40 price target. The analysts are positively biased into earnings, stating the F3Q16 earnings could see favorable margin growth against easier YOY comparisons from prior insurance reserve charges and more fully realized cost savings initiatives. "We remain positive into the quarter and long term though hope to gain incremental confidence in subsequent "2020 Vision" actions to maintain conviction." wrote Baird. The $40 price target assumes an 11.3x FTM EBITDA multiple one year from today. On a P/E basis, the price target assumes 20.8x FTM EPS, relative to a 10-year average of 16.2x, defended by the company's improved earnings growth opportunity through margin actions and a new(er) stock buyback program.