UPDATE: Jefferies Initiates ABM Industries at Buy on Vertical Expansion

In a report published on Wednesday, Jefferies analyst Dan Dolev initiated coverage on ABM Industries (NYSE: ABM) with a Buy rating and a price target of $28.

In the report, Jefferies stated, "With $4.3bn in sales, ABM is one of the largest janitorial companies in the US (6% share) and a significant player in the engineering, parking and security services markets. We use the S.E.R.V framework to identify opportunities in the US Business Services Sector. The three key long-term opportunities for ABM are: 1) ABM only addresses about one-third of a $110-120bn building services market and has initiatives in place to address the remaining two thirds. 2) The US engineering/facility management market is largely (~71%) un-vended. 3) ABM's recent reorganization is a key milestone towards becoming an integrated facility solutions provider. This can improve execution and profitability."

ABM Industries closed on Wednesday at $23.90.