Jefferies Upgrades Gibraltar Industries to Buy From Hold (ROCK)

Jefferies is out with an analyst note this morning, where they upgrade shares of Gibraltar Industries ROCK to Buy from Hold; they have a $16.00 price target on the stock (revised upward from $13.00). The analysts said, “With the valuation now more reasonable and a number of positive datapoints relating to retail building product sales and the housing market, we believe the risk reward has become favorable. Aggressive cost and facility reductions, as well as the sale of the processed metal product business, should drive higher and more consistent margins. We also believe that many still view Gibraltar as a steel processor with the shares yet to be afforded the higher multiples more typical of build product companies.” They added, “We believe that new and existing home sales have already bottomed. As housing turnover increases, we would expect to see an increase in sales of retail building products. In March, for the first time since the summer of 2006, we saw a year over year (yoy) increase in retail sales of building products and garden equipment. April and May data was up on a yoy basis as well. While non-residential construction remains a laggard, we suspect this market is finding a bottom as well.” Jefferies also noted that the company has “high incremental operating leverage” and they have a “strong financial position to support growth.” The week ahead examined by REAL experts live! Market Toolbox TV