Market Overview

Brean Cuts Estimates On IDEX, Watts Water Technologies And Xylem Over Forex Concerns

Share:

Brean Capital reduced estimates for IDEX Corporation (NYSE: IEX), Watts Water Technologies Inc (NYSE: WTS) and Xylem Inc (NYSE: XYL) Tuesday due to a decline in the Euro versus the Dollar.

Analyst Michael Gaugler noted that all three companies "derive about 35 percent to 40 percent of sales outside the U.S” and that the firm has reduced its revenue forecast assumptions by approximately 3 percent due to the currency headwinds."

Gaugler commented that with “anticipated negative FOREX impacts aside, we continue to recommend accumulation of IDEX Corp and Xylem shares, which we expect to continue to benefit from operational improvements (and thus, higher margins) through our published estimates.”

“With the shares of IDEX Corp and Xylem currently trading at P/E's of 18x and 15x our lowered 2016 estimates, respectively, we continue to see upside from current price levels and recommend accumulation at current levels.”

Gaugler considered “the anticipated currency headwinds as a temporary situation, masking some of the operational efficiencies that have translated into higher earnings to date. Despite our expectations of continuing weak end markets in Europe, we believe U.S. revenue exposure is sufficient to allow earnings to increase YOY in both 2015 and 2016 for all companies if currency headwinds extend throughout the entire year (which is factored into our forecasts).”

Investors may want to take note of any companies having exposure to currencies that are weakening versus the U.S. Dollar. In the above examples, a large percentage of sales were from outside the United States.

IDEX was rated Buy and its target price was cut from $86 to $81. Xylem was rated Buy and its price target was cut from $45 to $40. Both stocks were relatively quiet Tuesday.

Watts Water Technologies was rated Hold with no price target but was surging higher Tuesday and recently traded at $58.95, up 2.18 percent.

Latest Ratings for IEX

DateFirmActionFromTo
Jul 2019MaintainsHold
Jul 2019MaintainsHold
May 2019Initiates Coverage OnBuy

View More Analyst Ratings for IEX
View the Latest Analyst Ratings

Posted-In: Brean Capital Michael GauglerAnalyst Color Price Target Analyst Ratings Trading Ideas

 

Related Articles (IEX + WTS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
MUCascendReiterates65.0
ALDRCanaccord GenuityDowngrades20.0
LEGHLake StreetInitiates Coverage On21.0
CHUGoldman SachsUpgrades13.2
STZBMO CapitalMaintains230.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com

What Investors Are Looking At In The Stem Cell Sector

Homebuilding Stocks To Watch Following KB Home's Q4 Results