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Analyst: Manitowoc's Risk-Reward Profile Skewed To The Upside

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Analyst: Manitowoc's Risk-Reward Profile Skewed To The Upside
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Manitowoc Company Inc (NYSE: MTW) announced a one-for-four reverse stock split in September, prompting some analysts to revisit their thesis.

The Analyst

Seaport Global Securities' Michael Shlisky upgraded Manitowoc's stock rating from Neutral to Buy with a price target raised from a split-adjusted $38 to $48.

The Thesis

Manitowoc's turnaround initiatives in the past have been more than offset by downside in the crane cycle, but this may no longer be the case, Shlisky said in a Monday note. (See Shlisky's track record here.) 

After a meeting with Manitowoc management, Shlisky said the case can be made for a bottoming of the crane market. There are also observable signs of an operational turnaround, including a reduction in production time for crawlers from one month to one day, he said. 

Although the turnaround in the crane business will likely be a U-shape rather than a V-shape, the longer-term upside potential is greater than the longer-term downside potential, Shlisky said. The stock should be attractive for investors who are "comfortable with a low-growth environment" moving forward, the analyst said. 

Manitowoc's stock multiple deserves a boost, as it now appears the "worst is behind the company from a cycle standpoint" and ongoing initiatives to boost the business are gaining momentum, Shlisky said. 

Price Action

Shares of Manitowoc hit a new, split-adjusted 52-week high of $41.57 on Monday.

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Photo courtesy of Manitowoc Co.

Latest Ratings for MTW

DateFirmActionFromTo
May 2018Credit SuisseMaintainsNeutralNeutral
May 2018Stifel NicolausMaintainsBuyBuy
Apr 2018JP MorganMaintainsUnderweightUnderweight

View More Analyst Ratings for MTW
View the Latest Analyst Ratings

Posted-In: Crane Companies Cranes Manitowoc Michael ShliskyAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

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