KeyBanc Downgrades Elster Group SE (ELT) to Hold; Don't See Higher Bid; ESE and/or ITRI Next on Chopping Block

June 19, 2012 7:35 AM EDT
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Price: $20.54 --0%

Rating Summary:
    7 Buy, 8 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 6 | Down: 3 | New: 2
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KeyBanc downgraded Elster Group SE (NYSE: ELT) from Buy to Hold.

Analyst, Carter B. Shoop, said, "We believe the proposed acquisition price is reasonable, and that Elster is unlikely to see a higher bid (in our view; we are unaware of anyone else seriously looking at the asset)."

"We believe ESCO (NYSE: ESE), and to a lesser extent Itron (Nasdaq: ITRI), are the next most likely targets in the smart grid sector. We believe a potential acquirer would find ESCO attractive given its: 1) valuation (11.0x CY13 EPS x-amortization; 6.4x CY13 EV/EBITDA); 2) earnings growth and visibility in 2013 (SoCal Gas ramping; 27% YOY EPS growth in CY13); and 3) dominant market share position in Water and Gas RF comms, PLC comms, transformer diagnostics, etc."

For an analyst ratings summary and ratings history on Elster Group SE click here. For more ratings news on Elster Group SE click here.

Shares of Elster Group SE closed at $19.41 yesterday.

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