UBS Raises PT and Estimates on Stewart Enterprises (STEI); Strong Margin Improvement in the Quarter

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UBS maintains a 'Buy' on Stewart Enterprises (NASDAQ: STEI) price target of $9.50 (from $8.50).

Analyst, A.J. Rice, said, "STEI reported a 520 bps margin Y/Y increase in its cemetery business (18.5%) and a 200 bps margin improvement in its funeral segment (22.9%) in FY3Q12. Margin improvement in the quarter was driven by improving case volume trends, an increase in high end cemetery sales, benefit from a sales force reorganization ($5 mln annualized), and positive returns from the trust fund portfolio. By FY1Q13, STEI expects to fully realize $10 mln in annual savings from the restructuring."

"We are conservatively raising our FY13 FCF estimate from $86 mln to $96 mln to incorporate lower cash taxes." (FY12 EPS estimate raised from $0.42 to $0.44)

For an analyst ratings summary and ratings history on Stewart Enterprises click here. For more ratings news on Stewart Enterprises click here.

Shares of Stewart Enterprises closed at $7.98 yesterday, with a 52 week range of $4.92-$8.38.

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