UPDATE: Goldman Sachs Starts Boise Cascade Company (BCC) at Buy
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(Updated - September 22, 2016 9:06 AM EDT)
Goldman Sachs initiated coverage on Boise Cascade Company (NYSE: BCC) with a Buy rating and a price target of $34, implying upside of 38%. Analyst Brian Maguire noted leverage to the housing recovery and earnings upside.
"We believe investors are over-emphasizing BCC’s current cyclically-depressed EBITDA of ~$160mn and not focusing enough on BCC’s potential to generate normalized EBITDA of $275mn in the next 2-3 years. We believe that improving housing data (partially driven by an improving labor market with higher wages) will drive improving investor sentiment on BCC’s ability to achieve this level of earnings. Additionally, we view BCC’s strategy to shift veneer production from plywood to engineered wood as a strategic positive, since the expected growth rates of LVL and I-Joists are far superior to plywood," said Maguire.
Shares of Boise Cascade Company closed at $24.63 yesterday.
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