UPDATE: Goldman Sachs Upgrades Mueller Water Products on Improving Execution and Water Infrastructure Capex

In a report published Monday, Goldman Sachs analyst Jerry Revich upgraded the rating on

from Sell to Neutral, and raised the price target from $6.40 to $9.00. In the report, Goldman Sachs noted, “We upgrade MWA to Neutral from Sell as we now see 5% upside to 2014 consensus EBITDA due to higher US non-res capex and lower input costs. Our Sell call had been predicated on a longer path to mid-cycle EPS due to (1) margin pressure, (2) delayed public construction recovery, and (3) challenging cash flow. Consensus estimate cuts pressured shares to $1.98 in 2011, but we stayed negative for too long as municipal water spending and margins recovered, which combined with financial leverage drove the stock 4x off the bottom. Since being added to the Americas Sell list on 2/16/10, MWA is +70% vs. our coverage +118% vs. +60% for the S&P 500.” Mueller Water Products closed on Friday at $8.40.