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UBS on U.S. Advanced Industrial Equipment: Updating Sector Valuation Approach; Upgrading WSO

February 13, 2012 1:42 PM EST
WSO Hot Sheet
Rating Summary:
    3 Buy, 6 Hold, 2 Sell

Rating Trend: Down Down

Today's Overall Ratings:
    Up: 19 | Down: 7 | New: 26
UBS on U.S. Advanced Industrial Equipment: Updating Sector Valuation Approach; Taking WSO up to Neutral.

Analyst, Robert Barry, said, "We no longer weight average a recession valuation into our target prices given improving U.S. macro data and recent Euro leading indicators that have surprised to the upside. As a result our target prices generally move higher. While significant global macro risks remain, a 2012 US recession case now seems more balanced with other tail upside/downside outcomes. We’ve also taken this opportunity refresh ur views on multiples and valuation more broadly, including more use of next 12 months (NTM) estimates."

"We've been wrong on Watsco (NYSE: WSO), we think under-estimating the support from its dividend and U.S. focus. We still like FLS and are raising our target, but absent N/T catalysts and post a good run think it may pause N/T. We’re raising ATU estimates and target and stay constructive. See also our notes on Flowserve (NYSE: FLS), WSO, Actuant (NYSE: ATU), IDEX (NYSE: IEX)."


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