McGraw Hill Financial (MHFI) PT Trimmed to $111 at FBR Capital on 'Pricey' Acqusition

FBR Capital analyst William Bird trimmed his price target on Outperform-rated McGraw Hill Financial (NYSE: MHFI) to $111.00 (from $115.00), saying the "pricey" deal for SNL Financial upstaged a solid quarter.

Bird commented, "The shares of MHFI have sold off sharply on the pricey acquisition of SNL Financial. Though the high purchase price is tough to defend, the stock reaction seems exaggerated. We believe the acquisition likely prompts selling by event-oriented accounts who were looking for a large buyback. Also, near-term upside to estimates may be curtailed by deal dynamics (i.e., buyback blackouts, up-front costs, new debt). Separately, despite $0.05 to $0.07 of deal dilution, 2015 guidance of $4.35 to $4.45 was affirmed and 2Q results were solid, besting the Street by $0.07 and supportive of the thesis of margin expansion potential. We are lowering our 2016 estimate to reflect $0.15–$0.20 of SNL deal dilution, and our new price target is $111 (previously $115)."

For an analyst ratings summary and ratings history on McGraw Hill Financial click here. For more ratings news on McGraw Hill Financial click here.

Shares of McGraw Hill Financial closed at $105.58 yesterday.

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