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Piper Jaffray: Chart Industries 'Looks Like Good Value Following China Gas Price Cut'

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In a report published Tuesday morning, Piper Jaffray upgraded shares of Chart Industries, Inc. (NASDAQ: GTLS) from Neutral to Overweight, and raised its price target from $36 to $45. The promotion follows China's gas price cut and is in line with the firm's more bullish view on natural gas stocks.

However, the main reason behind the upgrade is the stock's valuation. At 6.5x EV/EBITDA, it is at "the bottom-end of the stock's four-year range (…) approaching ‘blown out' levels." While 2015 might or might not represent a trough year, after multiple consecutive guide-downs the analysts "no longer think investors will be shocked by continued weakness in demand."

In addition, the analysts believe "China may be set to resume its growth trajectory (at least in the D&S segment)," which lays the grounds for a potential upside surprise. "A mix-shift toward China would not necessarily benefit the company's margin profile –but it could provide much-needed revenue growth and help increase utilization rates at the company's newly-constructed facility," the report explained.

Shares of Chart Industries recently traded at $38.35, up 7.6 percent.

Latest Ratings for GTLS

DateFirmActionFromTo
Oct 2017Seaport GlobalUpgradesNeutralBuy
Dec 2016Raymond JamesDowngradesOutperformMarket Perform
Oct 2016Evercore ISI GroupDowngradesBuyHold

View More Analyst Ratings for GTLS
View the Latest Analyst Ratings

Posted-In: Piper JaffrayAnalyst Color Upgrades Price Target Analyst Ratings

 

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