Oscar Gruss Starts Jarden Corporation (JAH) at Buy; Dutchification - An Everlasting Share Buyback
JAH Hot Sheet
Rating Summary:3 Buy, 0 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 16 | Down: 7 | New: 23
Oscar Gruss initiates coverage on Jarden Corporation (NYSE: JAH) with a Buy. PT $38.00.
Oscar analyst said, "We believe that the buyback announcement is a positive inflection point which marks management’s confidence in the core business and attempts to address its discounted valuation. Buying back stock is a good use of its excess cash (estimated to be >$800M at the end of 4Q11), especially when the share price is trading at a single-digit EPS multiple. The elimination of a nominal dividend and replacement with a tax-deductible interest expense is an efficient use of cash flow. The suspended ~$30M dividend will provide ~2x coverage of pre-tax tender debt expense. Overall, we are betting on the positive effects of more debt to leverage the equity and believe that the downside price is limited to the low $30s near-term."
For an analyst ratings summary and ratings history on Jarden Corporation click here. For more ratings news on Jarden Corporation click here.
Shares of Jarden Corporation closed at $34.44 yesterday, with a 52 week range of $25.60-$37.50.
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Oscar analyst said, "We believe that the buyback announcement is a positive inflection point which marks management’s confidence in the core business and attempts to address its discounted valuation. Buying back stock is a good use of its excess cash (estimated to be >$800M at the end of 4Q11), especially when the share price is trading at a single-digit EPS multiple. The elimination of a nominal dividend and replacement with a tax-deductible interest expense is an efficient use of cash flow. The suspended ~$30M dividend will provide ~2x coverage of pre-tax tender debt expense. Overall, we are betting on the positive effects of more debt to leverage the equity and believe that the downside price is limited to the low $30s near-term."
For an analyst ratings summary and ratings history on Jarden Corporation click here. For more ratings news on Jarden Corporation click here.
Shares of Jarden Corporation closed at $34.44 yesterday, with a 52 week range of $25.60-$37.50.
Discover Wall Street's best ratings calls with the pros - Upgrade to Ratings Insider Elite. Free Trial!
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