FBR Capital Upgrades Joy Global (JOY) to Market Perform

FBR Capital upgraded Joy Global (NYSE: JOY) from Underperform to Market Perform with a price target of $10.00 (from $14.00).

Analyst Lucas Pipes commented, "With this report, we upgrade JOY to Market Perform, from Underperform, with a new price target of $10, lowered from $14. Following the stock’s recent sell-off down to ~$12 and a new company strategy outlined in its F4Q15 earnings (including cost cutting, reduced dividend, and amended credit agreement), we are more positive on relative valuation for JOY. We continue to anticipate restrained revenues (in line with guidance) and margins in 2016 and 2017, with only a slight improvement in both for our terminal-year valuation. With a new-normal revenue level well below recent historical years and conservative margins of about 12%, we believe further downside is largely baked into the current stock valuation, especially against our $10 price target. More positively, we think the company’s 2016 revenue guidance of $2.4B–$2.5B is now adequately conservative in the currently difficult market of challenged global miners. With a fitting outlook of the challenges facing Joy, we believe the company is now properly downshifting to a tighter structure and reducing costs appropriately for our long-term outlook."

For an analyst ratings summary and ratings history on Joy Global click here. For more ratings news on Joy Global click here.

Shares of Joy Global closed at $12.13 yesterday.

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