KeyBanc Upgrades Armstrong World Industries (AWI) to Overweight
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KeyBanc upgraded Armstrong World Industries (NYSE: AWI) from Sector Weight to Overweight with a price target of $50. Analyst Kenneth R. Zener sees attractive risk-reward.
"We upgrade AWI to OW ($50 price target equals 10x FY16 EBITDA) as rising North America demand (up 5% YOY in 1H16 vs. ~1% YOY 2H16 guidance) warrants a NT positive stance, as it may be a cyclical inflection point. AWI's latercycle, NA ceiling tile volumes fell ~29% since 2007, and with widespread 1H16 growth, we prefer to be early to the recovery vs. late. FY16 EBITDA guidance was held steady (~$320M vs. our $326M, FY16 GAAP EPS cut 4% to $2.05$2.25 on interest charges), following 2Q16 $0.56 beat to our $0.50 on higher NA's demand," said Zener.
Shares of Armstrong World Industries closed at $43.00 yesterday.
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