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Morgan Joseph Transitiones Coverage on Metalico (MEA) to a Buy

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October 5, 2009 9:53 AM EDT

Morgan Joseph transitiones coverage on Metalico (NYSE Amex: MEA) to a Buy rating and $5.50 price target.

Morgan analysts says, "As a leading domestic scrap metal recycler, we believe Metalico is well positioned to benefit from a rebound in commodity prices as well as a recovery in both the US and global economies. Demand for scrap metal should grow from both domestic and foreign consumers, as commodity prices move higher, reflecting rising infrastructure spending in the US and increased development in emerging markets, such as China and India. While scrap supply currently remains tight, we expect volumes to increase with a recovery in the construction and industrial markets in 2010, which should increase scrap flow and help Metalico improve margins. Furthermore, we believe customers looking to engage in 'green' practices will increasingly use recycled scrap metal over the longer-term, since it is more environmentally sound and, in some cases, more energy efficient when compared to other traditional metal producing processes...Management does not currently provide guidance. Our 2009 EPS estimate is ($0.02) and our 2010 EPS estimate is $0.29."

To see more analyst ratings on MEA Click Here.

Metalico, Inc., through its subsidiaries, engages in scrap metal recycling and lead metal products fabrication activities in the United States.