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KeyBanc Upgrades Armstrong World Industries (AWI) to Buy; Analyst Sees Attractive Entry

April 21, 2014 6:52 AM EDT
Get Alerts AWI Hot Sheet
Price: $124.22 -0.2%

Rating Summary:
    8 Buy, 13 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 11 | New: 11
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KeyBanc upgraded Armstrong World Industries (NYSE: AWI) from Hold to Buy with a price target of $63.00.

Analyst Kenneth R. Zener said, "We upgrade Armstrong World Industries, Inc. (AWI-NYSE) to a BUY with a $63 price target, based on: 1) its attractive later-cycle U.S. ceiling tile business currently overshadowed by new plant start-up costs; 2) better clarity on Wood Flooring’s 2H margin recovery (1% margin in FY13 vs. 9% and 8% in FY11 and FY12, respectively) expected during the 1Q call or May 21st analyst day; and 3) already lowered FY14 guidance of $2.55-$2.80 (our estimate is no $2.71) priced in."

"AWI’s pullback is understandable amid downward revisions to earnings, higher startup costs in Ceiling, and a still unclear U.S. ceiling tile volume recovery, but this is why we think now is an attractive entry point, with many negative catalysts already priced in, and its ~20% EBIT ceiling tile business still facing falling U.S. volume amid positive price/mix," he added.

For an analyst ratings summary and ratings history on Armstrong World Industries click here. For more ratings news on Armstrong World Industries click here.

Shares of Armstrong World Industries closed at $53.66 yesterday.



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