Why Piper Jaffray Is Upgrading Chart Industries

In a report published Tuesday, Piper Jaffray analysts upgraded

from Neutral to Overweight, while raising the price target from $36 to $45. The analysts said that the valuation has tumbled due to weak oil prices and several guidance misses. In the report, Piper Jaffray noted, "GTLS isn't exactly in the throws of a fundamental acceleration; we think management's tone during the Q4 earnings call should have convinced investors of that. However, for the first time in over a year, we believe investor expectations (and the stock's multiple) have come around to reflect Chart Industries' somewhat "iffy" outlook." "…on 3/1/2015, China announced a price cut for natural gas. In our view, this signals an effort to support natural gas vehicle sales despite cheap oil," the analysts said, while adding that China could boost orders significantly for GTLS. "We predict GTLS will no longer trade near the bottom end of its 4-year range - due to rising investor expectations that estimates have finally bottomed - but admittedly it is still difficult to predict what will happen in 2016," the analysts wrote. Piper Jaffray cut its EPS estimates for FY15 and FY16 from $1.89 to $1.78 and from $2.44 to $2.16, respectively, citing "a new, more accurate modeling approach made possible by additional disclosure in the 10K."