Jefferies Reiterates Buy, $17 Target on AM Castle

Jefferies maintains its Buy rating and $17 target price on AM Castle

following the company's recently closed acquisition of Tube Supply. Jefferies says it sees "the shares priced substantially below fair value following the recent dramatic sell-off. Regarding the deal, we expect it will be accretive to 2012 EPS, see it as a good strategic fit, and note its favorable valuation and positive implications on overall margins for CAS. Though at the low end of our initial range, we expect the acquisition and related financing to be accretive to 2012 EPS, but note potential dilution in later cycle estimates should its notes be converted. ...EPS estimate for 2012 increased to $1.42 (+$0.17), while our 2013 estimate increases to $1.94 (+$0.09). CAS closed at $9.28 per share on Thursday.