Nomura Securities Reiterates Neutral on Platform Specialty Products (PAH) Following Investor Day
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Nomura Securities reiterated a Neutral rating on Platform Specialty Products (NYSE: PAH), and cut the price target to $12.00 (from $11.00), following investor day. PAH negotiated an option to redeem Series B Preferred shares by December 15 for $460mn in cash and 5.5mn shares of PAH, instead of $600mn in April 2017.
Analyst Aleksey Yefremov commented, "Platform’s well-attended Investor Day in New York showcased the company’s revamped management team. One of the highlights for us was the detailed presentation on the Performance Solutions (PS) segment. Overall, we came away more impressed by the quality of the new PS portfolio and potential growth benefits from integrating acquired businesses. We commend PAH management for stabilizing the business after a rocky 2015, and acknowledge shares look increasingly attractive given 9.1x 2017E EV/EBITDA valuation. Ultimately, balance sheet concerns (7.0x net debt/EBITDA) paired with only modest cash generation in 1H16 keep us at a Neutral rating. However, we see PAH shares as attractive for long-term investors with high tolerance for risk. We acknowledge that the PS segment is undervalued and see optionality in ag recovery."
Shares of Platform Specialty Products closed at $9.35 yesterday.
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