Wells Fargo Starts TAL International (TAL) at Outperform; Continues Rapid Capacity Expansion

Wells Fargo initiates coverage on TAL International (NYSE: TAL) with an Outperform. Valuation range $42-45.

Wells analyst says, "We are initiating coverage of TAL with an Outperform rating, as we believe the combination of strong sector fundamentals and TAL’s discounted cash based valuation drives a positive risk-reward profile. TAL continues to rank among the most aggressive growers in the container leasing space, outspending its peer group on new capacity by more than 2x in 2010, with its $450 ytd capex and recent $86 million follow-on offering providing the scale to potentially reach similar levels in 2011. As TAL continues to grow the sector's largest owned container fleet, it is also trading at a significant discount to its peer group on a cash basis, which in our view positions TAL as a high quality, discounted way to play the container leasing sector, which we find advantageous at this point in the cycle. We are launching coverage of TAL with 2011 and 2012 cash EPS estimates of $5.51 and $5.93."

For more ratings news on TAL International click here and for the rating history of TAL International click here.

Shares of TAL International closed at $35.07 yesterday.

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