UBS Upgrades Actuant (ATU) to Buy; Recent Pullback has Improved Risk/Reward

UBS upgraded Actuant (NYSE: ATU) from Neutral to Buy. PT increased by $2 to $31.

UBS analyst said, "F3Q saw broad strength in ATU’s business, ahead of our estimates, with core growth +14% and EBIT margins up 140bp. Going forward we think growth accelerates in late cycle Energy (20% sales) but moderates in Industrial on a maturing cycle and tough comps, while still outpacing end markets on share gains and new products. We see Eng Sols slowing in F12 given auto launch cadences and a maturing Europe truck cycle. Electrical should benefit as solar troughs."

"Our F2012 estimates are down slightly ex adj. for Weasler and the F3Q beat as we add conservatism on revenue growth and/or margins, net of a better outlook in Energy. But given recent weakness valuation looks much more compelling." (UBS raises FY11 EPS estimate from $1.53 to $1.64 and FY12 from $1.86 to $1.90)

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

Shares of Actuant closed at $24.07 yesterday.

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