UPDATE: Global Hunter Securities Starts PolyOne (POL) at Buy

(Updated - June 4, 2015 11:30 AM EDT)

Global Hunter Securities initiated coverage on PolyOne (NYSE: POL) with a Buy rating and a price target of $49. Analyst Michael J. Harrison thinks its ongoing transformation still has legs, and he expects buying patterns will return to normal in Q2.

"Q1 results were weak as customers held back on purchases due to falling resin prices. However, buying patterns should return to normal in Q2 and POL should also see the full benefit of lower raw material costs. The company recently unveiled 2020 targets that show continued focus on execution and innovation to drive margin improvement. Importantly, we think the pruning of less-profitable business is nearing an end and POL is reaching an inflection point to leverage organic growth (and potential acquisitions) to the bottom line. We are initiating coverage with a Buy rating and a $49 price target, which is based on 9.5x our FTM EBITDA estimate (starting with Q2:16). This also equates to 18.1x 2016 EPS for a company we believe can deliver 20%-plus EPS growth the next three years (we note 2010-2014 delivered a 28% CAGR)," said Harrison.

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

Shares of PolyOne closed at $39.38 yesterday.

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