UPDATE: Credit Suisse Reinstates Coverage on Caesarstone Sdot-Yam Ltd. with Outperform Rating, $27 PT on Improved Liquidity Post Offering

In a report published Wednesday, Credit Suisse analyst Daniel Oppenheim reinstated coverage on Caesarstone Sdot-Yam Ltd.

with an Outperform rating and $27.00 price target. In the report, Oppenheim noted, “We are reinstating coverage of CSTE and maintaining our 2013 and 2014 EPS estimates of $1.50 and $2.10 following the recent secondary offering. We continue to see CSTE as well positioned to take advantage of the increased penetration of quartz countertops, particularly in the United States, given the region's improving housing market, and CSTE's focus on expanding its distribution network and capacity in this market. Following the closing of CSTE's secondary offering, we estimate that its trading float will increase by ~100% to $350 million on 15.7 million shares from ~$176 million on 7.9 million shares currently. The float will represent 45% of total outstanding shares, up from 23% previously. The increased liquidity and float will likely allow more institutional ownership, and potentially narrow the valuation gap vs. peers, as we believe limited liquidity was a driver of this difference (24% discount on 2014 EV/EBITDA).” Caesarstone Sdot-Yam Ltd. closed on Tuesday at $22.36.