Market Overview

Safety First: Why Baird Upgraded MSA Safety Shares

Share:
Safety First: Why Baird Upgraded MSA Safety Shares

MSA Safety Incorporated (NYSE: MSA) reported Tuesday after the market close with better-than-expected fourth-quarter results and 17-percent year-over-year revenue growth.

The Analyst

Baird analyst Richard Eastman upgraded MSA Safety from Neutral to Outperform and increased the price target from $89 to $94.

The Thesis

The Q4 results reflected a broad-based uptick in industrial product demand and sales, as well as continued share gain and improved international traction for self-contained breathing apparatus, or SCBA, sales, Eastman said in a Thursday note.

Sales and profits from the recently acquired Globe business continue to contribute incrementally, with the first-year accretion on track to meet or exceed the 15-20 cents per share GAAP guidance, the analyst said. 

Baird sees strength in the workplace safety equipment maker's sequential order growth that supports next-12-month growth in SCBA. French ACH orders are solidifying sales prospects for the second half of 2018 and the short-turns industrial businesses are showing continued improvement, Eastman said. 

Based on current trends, MSA guided to mid-single-digit percentage core/LC sales growth in calendar 2018, according to Baird. The research firm projects 30-35 percent operating profit leverage on the strength of cost and operational discipline, pricing and international operational efficiencies.

"Product liability cash flow appears structured for neutral impact over the next few years," Eastman said. 

Baird raised its calendar 2018 and 2019 adjusted earnings per share estimates to $4.30 and $4.84, respectively. MSA's valuation is attractive, Eastman said.

The Price Action

MSA Safety shares are up over 17 percent over the past year.

At the time of publication, shares of MSA Safety were up 1.99 percent to $81.85. 

Related Links:

Sell-Side: ADT A Secure Investment

Don't Forget This Global X Mining ETF

Latest Ratings for MSA

DateFirmActionFromTo
Jan 2019Initiates Coverage OnMarket Perform
Dec 2018DowngradesOutperformNeutral
Jul 2018MaintainsBuyBuy

View More Analyst Ratings for MSA
View the Latest Analyst Ratings

Posted-In: Baird Richard EastmanAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (MSA)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
WLCanaccord GenuityMaintains0.600
TDCanaccord GenuityMaintains79.0
CWBCanaccord GenuityMaintains34.0
CMCanaccord GenuityMaintains108.0
CRWDBank of AmericaMaintains86.0
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 vipaccounts@benzinga.com

A 'Compelling Buying Opportunity' In The Kraton Corp. Sell-Off

JELD-WEN Is A 'Second Half Story,' Wells Fargo Says In Downgrade Note