Jefferies Cuts Price Target on PolyOne (POL) to $36 Ahead of 3Q Report
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Jefferies maintained a Hold rating on PolyOne (NYSE: POL), and cut the price target to $36.00 (from $40.00), ahead of the company's 3Q earnings report. Brexit has been noted as a $0.01-$0.02 headwind in 2H16, PVC pricing is on the rise, and an increase in SG&A spending for growth initiatives will likely keep margins in check. Jefferies cut 2016 EPS estimates $0.05 to $2.15 and 2017 $0.10 to $2.35 to account for the slower growth.
Analyst Laurence Alexander commented, "Further margin expansion in the core GCAI, Distribution, GSEM, and PP&S segments appears challenging, and DSS improvements will likely account for most of the expected margin growth through 2020E. Our 2016E-2018E FCF estimates suggest a 6% average yield, and the 2017E-2018E EPS bridge hinges on successful cash flow deployment."
Shares of PolyOne closed at $32.03 yesterday.
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