Goldman Sachs Downgrades Rexnord (RXN) to Sell

Goldman Sachs downgraded Rexnord (NYSE: RXN) from Neutral to Sell with a price target of $24.00 (from $31.00). Analyst Samuel H. Eisner noted stagnant CROCI.

"RXN trades at a premium to short-cycle competitors (on both P/E and EV/EBITDA basis) despite a below average growth rate in CY15. In our view, moderating end markets and 20% European exposure (organic and FX headwinds) should lead to mid-single-digit revenue headwinds over the next 24 months. In turn, we expect average EPS growth relative to our coverage (20% for RXN vs. 24% for coverage) over the same time frame, and we believe end market weakness is not fully being factored into shares. We reduce our FY15-FY17 EPS estimates by 7% on average and are now 6%-9% below the Street. Our new 12-month, $24 price target, implies 6% downside risk vs. 7% upside potential for our coverage," said Eisner.

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

Shares of Rexnord closed at $25.56 yesterday.

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