UPDATE: Credit Suisse Upgrades Regal-Beloit Corporation to Outperform, Raises PT on Raised EPS Estimates

In a report published Wednesday, Credit Suisse analyst Julian Mitchell upgraded the rating on Regal-Beloit Corporation

from Neutral to Outperform, and raised the price target from $74.00 to $76.00. In the report, Mitchell noted, “We upgrade our rating on RBC from Neutral to Outperform; our 2013-15 EPS estimates move up slightly, and our TP is now $76 (from $74). We are raising our 2013/2014/2015 EPS estimates to $4.48/$5.13/$5.74 (from $4.39/$5.05/$5.66) respectively. Structural concerns now baked into consensus: We initiated with a Neutral rating last month due to concerns that RBC's market share might be squeezed by pure-play emerging players and broad-based global conglomerates. The stock's underperformance since Q1 earnings (18% relative to the Russell 2000), and our conversations with investors since our initiation, suggest these risks are now largely priced in. C&I and Mechanical close to trough: While investors seem focused on the problems in HVAC, which we think are now well understood, we see scope for a 2H rebound in the non-HVAC segments (50% of sales), where demand has been weak for 9 months, and consensus expectations are low. As per our Temperature Check industry report out today, short cycle inventories appear largely depleted, and monthly order figures from a number of global industrial firms suggest a 2H13 recovery is increasingly likely.” Regal-Beloit Corporation closed on Tuesday at $67.41.