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KeyBanc Initiates Coverage on Cooper Industries (CBE) with a Hold

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November 20, 2009 8:12 AM EST

KeyBanc initiates coverage on Cooper Industries (NYSE: CBE) with a Hold rating.

KeyBanc analyst says, "Our 2009E is set at $2.43 vs. $3.59 (-32% year-over-year), including a 4Q09E (December) of $0.67 vs. $0.84. Our 4Q09 revenue estimate is $1.24 billion, down 18.5% year-over-year. The Company's current guidance policy is to provide annual and quarterly EPS and revenue guidance. CBE's guidance for its 4Q09 is for tota lrevenue to decline 16-20% and for EPS (excluding restructuring expenses) to be in the range of $0.60-$0.70. For the full year, EPS is expected to be in a range of $2.35-$2.45 (excluding restructuring charges) and free cash flow is expected to be in excess of $650 million. Our 2010E is $2.84 with total revenue growth of 3%. While 2010 guidance has not been announced, management's recent commentary indicates expectations for 2010 include low single-digit total revenue growth and up to double-digit EPS growth. Our 2010 estimates assume 3% revenue growth and 17% EPS growth."

"Overall, we believe CBE's strong management team, effective execution, focus on continuous cost reductions and market leadership will likely provide a solid foundation for long-term earnings growth. However, in our view, these benefits will likely manifest in a steady and measured improvement in EPS, which we think is already captured at the current share price."

To see all the upgrades/downgrades on shares of CBE, visit our Analyst Ratings page.