Auriga Starts GrafTech International (GTI) at Buy
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Price: $2.70 --0%
Rating Summary:
1 Buy, 3 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 2
Rating Summary:
1 Buy, 3 Hold, 2 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 0 | Down: 0 | New: 2
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After the close, Auriga initiated coverage on GrafTech International (NYSE: GTI) with a Buy rating and $20 price target.
The firm comments, "Graftech International (GTI) is among the largest and lowest cost producers of high quality graphite electrodes, a consumable (i.e. the razor blades in the production process of the metals industry, most notably steel). We believe the company is well positioned to benefit as steel utilization rates increase over the intermediate- and longer-term. However, in the more near-term, customers could curtail capacity in an effort to better match production with near-term demand fundamentals. While we can't rule out more downside in the shares, we recommend investors take partial positions and add on weakness, particularly since shares are trading at less than 8x our 2012 EPS estimate. We note, in the case of customer production curtailments, GTI has a highly variable cost structure to assist the company in navigating through near-term headwinds. Furthermore, the company should continue to benefit from relatively recently completed acquisitions as they are further integrated into the company. Our $20 price target is derived by applying a 12x P/E multiple to our 2012 EPS estimate of $1.70."
For more ratings news on GrafTech International click here and for the rating history of GrafTech International click here.
Shares of GrafTech International closed at $12.34 yesterday.
The firm comments, "Graftech International (GTI) is among the largest and lowest cost producers of high quality graphite electrodes, a consumable (i.e. the razor blades in the production process of the metals industry, most notably steel). We believe the company is well positioned to benefit as steel utilization rates increase over the intermediate- and longer-term. However, in the more near-term, customers could curtail capacity in an effort to better match production with near-term demand fundamentals. While we can't rule out more downside in the shares, we recommend investors take partial positions and add on weakness, particularly since shares are trading at less than 8x our 2012 EPS estimate. We note, in the case of customer production curtailments, GTI has a highly variable cost structure to assist the company in navigating through near-term headwinds. Furthermore, the company should continue to benefit from relatively recently completed acquisitions as they are further integrated into the company. Our $20 price target is derived by applying a 12x P/E multiple to our 2012 EPS estimate of $1.70."
For more ratings news on GrafTech International click here and for the rating history of GrafTech International click here.
Shares of GrafTech International closed at $12.34 yesterday.
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