International Strategy & Investment Group Discusses Fortune Brands

International Strategy & Investment Group Inc. is out with a research report on Fortune Brands

and it has a Hold rating and a $53 price target on shares. In a note to clients, International Strategy & Investment Group writes, "On September 16th, FO will begin trading on a when issued basis where the spirits business will trade under the ticker BEAM and the home & security business will trade under the ticker FBHS. Our analysis suggests that given the global sell-off over the last several months, the FO equity is valued fairly on a Sum-of-Parts basis. We estimate a trading range of $37-50 for spirits and $10-16 on home; we think fair value is currently $42 and $12. We believe the majority of the investor base and equity value remains in the spirits business. As with any spin-off, it can create opportunities as the businesses separate. We believe the investor base is more heavily weighted to the spirits side of the business. That said, we believe the majority of investors who own FO, own it for the spirits business, not the home & security business. This dislocation in the investor base could create some interesting disconnects in valuation when the stocks begin to trade when issued on the September 16 and as a fully split companies on October 4 ." Shares of FO closed at $55.04 on Friday.