Skip to main content

Market Overview

Buybacks And M&A Could Be In USG's Near Future


Jefferies said Hold-rated USG Corporation (NYSE: USG) could buyback shares to maintain the low-end of its leverage target and enter in to a bolt-on acquisition to expand in West Coast.

"While FCF will be depressed in 2017 from the $75 mil spend for advanced manufacturing, including the proceeds of the L&W sale, we believe USG has $300-400 mil dry powder to buy back stock to maintain the low-end of its leverage target (1.5-2x)," analyst Philip Ng wrote in a note.

Ng, who believes a transformative acquisition as unlikely, cut the price target to $29 from $33 based on based on 2017 estimated EBITDA of $689 million and a 7.0x multiple.

Meanwhile, the analyst noted that the off-take agreement with ABC is "more manageable than feared."

Though the stock is expected to be range bound given the uncertainty on volumes and pricing in wallboard, the analyst sees strong balance sheet will enable management to start returning cash back to shareholders in 2017.

At time of writing, shares of USG rose 1.87 percent to $26.68.

Latest Ratings for USG

Jul 2018CitigroupMaintainsNeutralNeutral
Jun 2018BuckinghamMaintainsNeutralNeutral
Jun 2018Raymond JamesDowngradesOutperformMarket Perform

View More Analyst Ratings for USG
View the Latest Analyst Ratings


Related Articles (USG)

View Comments and Join the Discussion!

Posted-In: Jefferies Philip NgAnalyst Color News Price Target Reiteration Analyst Ratings

Latest Ratings

GIKColliers SecuritiesInitiates Coverage On14.0
SANWLake StreetInitiates Coverage On6.0
LILAMorgan StanleyDowngrades15.0
BEJP MorganUpgrades36.0
NEXACredit SuisseUpgrades11.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
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.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
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