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Analysts Respond To Carl Icahn's Stake In Manitowoc Company

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December 30, 2014 3:36 pm
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Carl Icahn reported a 7.77 percent stake in Manitowoc Company Inc (NYSE: MTW) Monday and called for the break up the company.

The stock was up approximately 10 percent after the announcement, although recently traded down 2 percent at $22.35.

Credit Suisse analyst Jamie Cook commented that “MTW has become a breakup target as the company's two businesses have no real synergies other than Foodservice acting as diversification for the cyclical Cranes.

“Foodservice does appear undervalued, in our view, and is a quality business for MTW who is one of the large players in the market ($1.5B sales; 16.2 percent OM) with a broad range of products across both hot and cold. MTW also has significant exposure to the "growthier" restaurants market (~67 percent percent of sales).

“There remain opportunities to improve Foodservice margins (which trail competitors ITW and MIDD) as MTW has implemented cost initiatives and is focusing on growing Kitchencare/aftermarket.”

Credit Suisse maintained an Outperform rating and $27 price target.

William Blair analyst Lawrence DeMaria felt that the company’s management is not “likely to get caught up in the short-term fix attempt” of splitting the company as management sees the crane business as cyclical and “prone to sustained slumps.”

William Blair maintained a Market Perform rating and $20 price target.

In terms of valuation, BB&T analyst C. Schon Williams felt the breakup value is approximately $34 per share and that Icahn’s intervention could push the price to that level.

BB&T maintained a Buy rating and $26 price target.

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