Jefferies Upgrades Regal Beloit (RBC) to Buy, Price Target $78

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Jefferies upgraded Regal Beloit (NYSE: RBC) to a Buy rating from its previous rating of Hold. The firm also raised their price target on the company to $78 from $60. In increase in their price target reflects the increases in their EPS estimates for FY10,11,12. EPS estimates for FY10 raised 5c to $3.90, raised 4c to $4.44 for FY11, and raised 15c to $5.05 for FY12. Revenue estimates increased for FY2010 to $2,243M from $2,215M, but decreased for FY11 and FY12 to $2,426M, $2,604M from $2,450M, $2,640M. Jefferies believes that with an increase in the demand for energy efficient engines sales will increase favorably around the world.

The firm reports that, "We believe RBC's adoption of Toyota Lean combined with Six Sigma will drive cost savings for several years as the strategies have only reached 15% of the ops. We expect at least 50 bps/year of savings and for the operating margin to reach a new peak."

For more ratings news on Regal Beloit click here and for the rating history of Regal Beloit click here.

Shares of Regal Beloit closed at $57.25 yesterday, with a 52 week range of $45.61-$67.32.

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