Market Overview

KeyBanc's Bullish Thesis On Federal Signal Played Out As Expected

Share:
KeyBanc's Bullish Thesis On Federal Signal Played Out As Expected

Shares of Federal Signal Corporation (NYSE: FSS) gained 17 percent Tuesday and hit a new all-time high of $28.32 in reaction to its second-quarter earnings report. This now puts an end to KeyBanc's year-long bullish stance on the stock.

The Analyst

KeyBanc Capital Markets' Steve Barger downgraded Federal Signal from Outperform to Sector Weight with no assigned price target (prior price target of $27).

The Thesis

Federal Signal, a provider of variety of emergency lighting, sirens and related products, reported a top-and-bottom-line earnings beat that pushed the stock north of KeyBanc's prior $27 price target, Barger said in a note. The company's solid execution since a revenue and operating margin trough in 2016 continued in the quarter and management deserves credit for managing growth since then.

Looking forward, Federal Signal's move into new markets and management's continued pursuit of accretive acquisitions should drive growth for the near-term, the analyst said. At the end of the day, however, the stock is up 72 percent since the firm turned bullish in May 2017 versus the S&P 500's 19 percent gain over the same time period. The stock is now trading at 18.1 times 2019 estimates, which implies a balanced risk/reward profile at current levels.

Price Action

Shares of Federal Signal were trading down 8 percent at $25.62 Wednesday afternoon.

Related Links:

77 Biggest Movers From Yesterday

Earnings Scheduled For August 8, 2018

Latest Ratings for FSS

DateFirmActionFromTo
Aug 2018DowngradesOverweightSector Weight
May 2017UpgradesSector WeightOverweight
May 2015DowngradesOverweightSector Perform

View More Analyst Ratings for FSS
View the Latest Analyst Ratings

Posted-In: construction KeyBanc Capital Markets Steve BargerAnalyst Color Downgrades Analyst Ratings Best of Benzinga

 

Related Articles (FSS)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
NVDACascendMaintains220.0
ADBECleveland ResearchInitiates Coverage On283.0
IMOCiBCUpgrades
RETAJefferiesMaintains254.0
SNAPAreteUpgrades
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

Roth Capital Likes Ligand, But Valuation Renders Shares 'Increasingly Speculative'

What Analysts Like In Applied Optoelectronics' Q2