Wedbush Raises Price Target on USG Corp. (USG) to $30 Following Checks

Wedbush reiterated a Neutral rating on USG Corp. (NYSE: USG), and raised the price target to $30.00 (from $27.00), following wholesale distributor checks. Specific to 2Q, commentary from the checks imply an average price growth of 5.8%. This compares to price letters which ranged from 5-15% in late March. Volumes are expected to contribute nearly 3% of the growth with negligible direct impact or risk from Brexit.

Analyst Al Kaschalk commented, "We remain patient on shares of USG Corporation (USG) as the benefits from a diversified revenue base (residential and commercial construction) have yet to show signs of consistently working together. That said, our positive wallboard checks suggest strong 2Q and favorable cadence on outlook come July 21st 2Q earnings release. With mix strength in Surfaces and Substrates, operating margins should continue to show improvement, as the more positive landscape for volumes only add to constant price increases in Ceilings and successful cost-reduction efforts across the business. On favorable earnings revisions, we raise our 12-month price target but maintain our NEUTRAL rating as we believe shares accurately reflect underlying growth opportunities."

For an analyst ratings summary and ratings history on USG Corp. click here. For more ratings news on USG Corp. click here.

Shares of USG Corp. closed at $26.65 yesterday.

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