FBR Capital Upgrades Matson, Inc. (MATX) to Outperform

FBR Capital upgraded Matson, Inc. (NYSE: MATX) from Market Perform to Outperform with a price target of $30.00 (from $28.00).

Analyst John Mims states, "We believe MATX should be bought now . . . our new price target implies 30% upside in 12 months, but the stock is likely an easy double this cycle. Matson has quietly emerged as the most compelling value, GARPy, yield-focused name in our coverage universe. The firm enjoys unassailable market dominance and a considerable five-year runway for volume growth in its core Jones Act container trade, has what we believe to be an absolute game-changing margin catalyst with the launch of new vessels this cycle, boasts a 10%+ free cash flow yield (and a 2.8% dividend yield), and at 6.0x our 2015 EV/EBITDA forecasts, is the cheapest name in our coverage universe."

He added, "With the growth and margin opportunities we foresee over the next five years, we believe Matson’s peak earnings will surpass $3.00 this cycle (double our 2015 estimates), and the stock will likely trade into the $50–$60 range (a potential double). The bear case on MATX, which has weighed on the stock YTD, is focused on a relative lack of near-term catalysts and possible near-term competitive headwinds. We believe these are fully priced into the stock at current levels, however, and strongly believe that any investor with a 2+ year time horizon should begin building positions in MATX now, as any positive momentum in the coming quarters will likely drive significant momentum in share price."

For an analyst ratings summary and ratings history on Matson, Inc. click here. For more ratings news on Matson, Inc. click here.

Shares of Matson, Inc. closed at $23.58 yesterday.

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