Market Overview

IHS May See Markit Merger Headwinds, But Baird Still Finds It Attractive


Baird analysts expect IHS Inc. (NYSE: IHS) to face Markit Ltd (NASDAQ: MRKT) merger headwinds. However, the brokerage finds the stock to be an attractive one. It has a Neutral rating and slashed the price objective to $122 from $132.

The brokerage believes results, as well as fine-tuned guidance included compensating positives and negatives. For instance, it named Transportation/Auto as performing exceptionally well. However, the company's resources, as well as Resources/energy bookings have yet to see the stability.

The analysts wrote in a note, "Organic subscription revenue trends are soft, but margin performance and guidance is excellent. We view risk/reward increasingly favorably in standalone IHS, but are looking to gain conviction in MRKT (not covered) ahead of close of "merger of equals."

The analysts added, "We find current risk/reward in pre-merger IHS intriguing, given combination of: - Valuation, trading at ~14.4x NTM adj. FCF/sh. (using our adj. EBITDA estimate and assuming ~65% FCF conversion), with what we view as slightly elevated but reasonable financial leverage (3.5x net debt/LTM EBITDA)."

The brokerage believes its IHS Energy business was challenged by certain "difficult end-market conditions." The analysts also think that bookings have yet to see stabilization. However, the brokerage said it view IHS Energy as a strong, wide moat business.

Latest Ratings for IHS

Mar 2016MaintainsHold
Mar 2016DowngradesBuyNeutral
Mar 2016MaintainsNeutral

View More Analyst Ratings for IHS
View the Latest Analyst Ratings

Posted-In: BairdAnalyst Color Price Target Reiteration Analyst Ratings Press Releases


Related Articles (IHS + MRKT)

View Comments and Join the Discussion!

Latest Ratings

ANIKFirst AnalysisDowngrades
HUNAlembic GlobalAssumes
POOLStephens & Co.Reiterates196.0
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

9 Stocks Haunted By Brexit, Creating Unwarranted Drops

CEO Transition Doesn't Change Citi's View On Honeywell