UPDATE: Seaport Global Securities Downgrades RBC Bearings (ROLL) to Neutral
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(Updated - October 14, 2016 10:21 AM EDT)
Seaport Global Securities downgraded RBC Bearings (NASDAQ: ROLL) from Accumulate to Neutral with a price target of $73.00 (from $88.00). Analyst Walt Liptak said he sees weak industrial sector demand and airframe channel inventory volatility.
"We believe that the industrial sector weakened over the last three months as evidenced by the fluctuations in the recent Manufacturing ISM Report PMI data. As a result, we are expecting ROLL's industrial business to experience continued core sales declines in the short term. We are concerned that the aerospace supply chain may be under pressure in 2H:16 as OEs de-risk their production with inventory reductions. We are lowering our price target and EPS estimates. Our new $73 price target (from $88 previously) equates to a 2017 EV/EBITDA of 11.7x and P/E of 22.3x. We are lowering our 2017 and 2018 EPS estimate to $3.28 from $3.43, and $3.67 from $3.81, respectively, due to ROLL's weaker end market outlooks," said Liptak.
Shares of RBC Bearings closed at $73.32 yesterday.
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