UPDATE: Piper Jaffray Initiates Oshkosh at Neutral on Defense Overhang

Piper Jaffray initiated coverage on Oshkosh OSK with a Neutral rating and a $28 price target. Piper Jaffray noted, "The company, which makes aerial work platforms, tactical defense vehicles, and various types of specialty trucks, is in the process of preparing for a major decline in U.S. defense spending (the Defense segment represented 58% of 2011 sales and substantially all of 2011 profit). As a result of these budget cuts, we believe company-wide sales will contract by 4% in 2013 and 13% in 2014. OSK aims to offset this impact by cutting costs, penetrating global markets, and riding a rebound in construction activity. At this point we believe OSK's multiple, as well as PJC/consensus estimates, imply successful implementation of this strategy, leaving little room for error." Oshkosh closed at $28.09 on Monday.