Stifel Reiterates Buy on Iron Mountain (IRM) After Meeting with Management
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Stifel reiterated a Buy rating and $44.00 price target on Iron Mountain (NYSE: IRM) after meeting with management. Management noted the vendor consolidation trend, in certain cases, is moving from two providers to one provider. Stifel views this as a positive in the context of IRM purchasing its next-largest competitor.
Analyst Shlomo Rosenbaum commented, "We walked away from IRM management meetings last week with incremental comfort around the sustainability of the storage business on a number of fronts. First, there are practical hurdles for document scanning to replace regular document storage with regard to documents that are used for proof/evidence. Second, the continued move towards vendor consolidation among large clients improves IRM’s market position, particularly after the purchase of Recall. Planned Recall synergies and transformation program cost take-outs are either on schedule or ahead of schedule, and we expect the impact in 2016 to be more 4Q weighted. We continue to believe that investors do not appreciate the EBITDA/OIBDA margin expansion coming in 2017, which should give comfort that cost synergies are achievable and that the dividend can continue to grow. We reiterate our Buy rating and $44 target price on the shares."
Shares of Iron Mountain closed at $36.77 yesterday.
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