Wells Fargo Increases Valuation Range For Actuant Following Earnings Release

Wells Fargo reiterated its Outperform rating and raised the valuation range of Actuant Corporation (NYSE: ATU), saying higher expectations leading into Q3 results dragged shares down.

As such, the company's third-quarter EPS of $0.40, which topped the Street's $0.37 estimate, was unable to offset a lower full-year guide or signs of extended off-highway OEM plant shutdowns heading into the company's fiscal 2017.

"We believe incremental weakness within the company's higher margin Enerpac business and additional volume pressure were the primary offsets to investor expectations," analyst Allison Poliniak-Cusic wrote in a note.

Related Link: Actuant Q3 Results Exceed Expectations

"However, with progress being made towards the $300 million EBITDA target by FY18 and strategic playbook for Industrial entering the implementation phase under new leadership, coupled with the company's strong cash generation, we maintain our positive outlook on shares," the analyst added.

The analyst adjusted the FY16/17 EPS estimates to $1.23 and $1.30 (previously $1.20/$1.35). in addition, the analyst raised the valuation range to $28–$30 from $25–$27.

Shares of Actuant closed Thursday's regular trading session at $24.90. Within the first hour of Friday's regular session, the stock was down 3.33 percent at $24.07.