UBS Cuts Price Target on IHS (IHS) to $36; Reiterates Neutral
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UBS maintained a Neutral rating on IHS Inc. (NYSE: IHS), and cut the price target to $39.00 (from $40.00), as the company releases initial 2017 guidance. IHS guided to 2017 EPS of $2.02-$2.08, with the midpoint in line with Street expectations. 2016 estimates were reaffirmed.
Analyst Alex Kramm commented, "In addition to reaffirming FY16 guidance, tonight INFO released initial 2017 guidance. This includes EPS guidance of $2.02-$2.08, with the midpoint in line with Street expectations. That said, with 2016 EPS still expected to come in toward the mid-to-high end of its $1.72-$1.78 range, management has stepped back from the ~20% EPS growth discussed immediately following the IHS/Markit merger (now ~17% at the midpoint). Top-line expectations were also a bit soft given a $50mm FX-related headwind, with 2017 revenue ($3.49bn-$3.56bn vs. $3.58bn UBSe) and organic growth (2%-4% vs. 4.4% UBSe) guidance both missing our forecasts. Although the company's initial EPS target matched Street expectations, we still have difficulty getting to company guidance for FY17, and with a softer-than-expected outlook for core performance, we would not be surprised by some weakness in the shares tomorrow."
Shares of IHS Inc. closed at $117.25 yesterday.
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