UPDATE: Credit Suisse Initiates W.R. Grace & Co. with Outperform on Expected Global Construction Pickup

In a report published Monday, Credit Suisse analyst John P. McNulty initiated coverage on W.R. Grace & Co.

with an Outperform rating and $91.00 price target. In the report, McNulty noted, “Despite a solid run in the stock over the past few years, we believe its valuation doesn't fully reflect the strength of GRA's portfolio or its ability to generate significant FCF. Fundamentally, over the next few years GRA should benefit from a pickup in global construction, enjoy stable (and high margin) growth in catalysts (beyond the near-term), and see an improving macro help to drive profitability in the materials segment, all while raws remain largely benign. With all of the above, the ‘earnings deck' cleared for 2013 with their recent preannouncement, significant cash generation to come (for bolt-on M&A and share repurchases/dividends post-bankruptcy) and the company getting closer to emergence (slated for 4Q13), we believe GRA should enjoy modest multiple expansion and solid long-term earnings growth that drives the stock toward our price target of $91.” W.R. Grace & Co. closed on Friday at $73.38.