Mobile Mini, Inc. MINI’s intermediate-term outlook is well-supported, according to a new sell-side bull. 

The Analyst

Baird analyst Andrew Wittmann upgraded Mobile Mini from Neutral to Outperform and increased the price target from $47 to $48.

The Thesis

Despite shares trading off 14 percent earlier this week, the mobile storage company's stock presents an attractive and unchanged earnings outlook, Wittmann said in the Friday upgrade note. (See the analyst's track record here.) 

The company’s unexpected restructuring could result in cost savings, adding more confidence in its opportunity and future projections, the analyst said. 

The company was unable to identify unused storage assets and consolidate 14 branches without conceding revenue or service territory, according to Baird. 

“MINI notes $5-7 million of annual cost savings potential from the closure of 14 locations, made possible through the disposal of the 26,000 scrap units; we did not include the full amount," Wittmann said. 

Tank and pump volumes are improving; Mobile Mini is pursuing price increases; andn interest expenses could be lighter than anticipated, the analyst said. 

Mobile Mini expects rental revenue in the portable storage segment to grow at above-average rates this year and confirmed the recovery in tank and pump, according to Baird.

“Revenue is expected to deliver 60-percent-plus incremental margins for the full year, pushing margins higher." 

Price Action

Mobile Mini shares were up 6.11 percent at $41.65 at the time of publication Friday. 

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