Nomura Securities Maintains a 'Neutral' on SPX Corp. (SPW); Selling its Service Solutions Business for $1.15B

Nomura Securities maintains a 'Neutral' on SPX Corp. (NYSE: SPW) price target raised from $66 to $75.

Analyst, Shannon O'Callaghan, said, "Given the focus on Power and Flow, SPX’s auto diagnostics and service tools business (called Service Solutions) is usually not the focus of attention, but that changed yesterday when Robert Bosch GmbH agreed to buy Service Solutions for 12.7x 2011 EBITDA (we estimate 11.3x 2012 EBITDA). We’ve always considered Service Solutions to be an attractive business with a strong position, but the value created by the sale to Bosch was higher than our prior assumed valuation for the business. We are lowering our 2012 EPS estimate from $4.90 to $4.53 pro forma for the deal, maintaining 2013 at $5.80 and raising our price target to $75 (16.5X new 2012 EPS estimate vs. prior 13.5x old 2012 EPS estimate) reflecting the value creation from the deal vs. our prior assumptions."

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

Shares of SPX Corp. closed at $67.50 yesterday.

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