Quad/Graphics (QUAD) PT Raised to $10.30 at Rosenblatt

Rosenblatt analyst Barton Crockett raised the price target on Quad/Graphics (NYSE: QUAD) to $10.30 (from $7.70) while maintaining a Buy rating.

The analyst commented: "Quad's investor day on 11/20 was interesting on a couple of fronts: 1) The company introduced very long-term guidance, saying sales trajectory can return to growth in three years, while EBITDA margins rise at least 100 bps in three years and 140 to 640 bps in five; 2) Quad delved into its nascent but intriguing In-Store Connect effort, which they see contributing to the consolidated improvement. There's enough substance to these prospects for us to modestly adjust the peer-low EV/EBITDA multiple assumptions in our conservative SOTP (to 4.0x from 3.4x), driving our price target up $2.60 to $10.30, 47% above the recent close. Call optionality is intriguing. Moving the EBITDA multiple assumptions up even closer to peer levels, and/or a better long-term EBITDA performance than the low-end of guidance we assume, has potential to drive substantial upside to our new price target, while downside could be limited by this company's track record of strong cost/capital structure discipline in a difficult environment."

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