Jarden's Track Record Is What Matters For Investors

• Jarden Corp JAH shares have declined 15.45 percent over the past three months, hitting a low of $44.53 on October 29.
• RBC Capital’s Nik Modi has upgraded the rating on the company from Outperform to Top Pick, with a price target of $60.
• The recent sell-off in the stock and its underperformance offers an attractive investment opportunity, given that Jarden offers among the best risk/reward profiles in RBC Capital’s coverage universe.

Analyst Nik Modi believes that several factors have adversely impacted the stock, independent of Jarden fundamentals, including “1) tough tape for companies issuing equity, 2) concerns over platform companies and 3) sell off in discretionary/ retail stocks.”

These factors have led to the decline in the share price over the past three months, with Jarden now being the cheapest stock in RBC Capital’s coverage universe. Modi believes that there is 29 to 50 percent upside to the stock from the current levels.

“Perhaps due to overarching concerns in the marketplace about platform companies, JAH has been lumped in with companies that are perceived to need acquisitions to drive their growth,” the RBC Capital report stated.

Although Jarden has been actively looking at acquisitions, the company has also been growing its organic topline, on a constant currency basis, at over 5 percent over the last two years.

On the other hand, while many investors were disappointed with the company’s 2016 EPS guidance despite two major deals, Modi believes that there is greater upside than downside and that the guidance could prove to be conservative.

“With this bar likely set low, we would not be surprised to see Jarden beat and raise throughout 2016, driving multiple expansion towards staples peers,” Modi added.