Jefferies Cuts Price Target on Bemis (BMS), Inflation Maybe Impacting Volumes
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Price: $57.25 --0%
Rating Summary:
2 Buy, 14 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
Rating Summary:
2 Buy, 14 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 8 | Down: 5 | New: 26
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Jefferies is maintaining its Hold rating on shares of Bemis (NYSE: BMS) as it lowers its price target from $36 to $34.
The firm reports that BMS's dividend yield of 3.1% and valuation of 6.8x EV/EBITDA is certainly solid, but notes that it will remain on the sidelines until there is more visibility on volumes and the company's ability to offset the run up in petrochemical costs.
The company bought back 1.7 million shares in Q1, but Jefferies feels that it wont do much more ahead as management is keeping its focus on its investment grade rating and actively looking for potential M&A targets.
Jefferies comments that, "Historically, the specialty resins have been more stable than the commodity grades, but due to supply shortages and a surge in energy prices, resin across the board was up more than 15% during Q1. With the timing of the pass through generally longer for the specialty grades, coupled with the lengthier pass through from the Alcan business, Bemis will likely operate with a negative price cost spread until late Q3."
Jefferies is lowering its FY11 and FY12 EPS estimates from $2.37 and $2.70 to $2.17 and $2.50.
For more ratings news on Bemis click here and for the rating history of Bemis click here.
Shares of Bemis closed at $32.16 yesterday.
The firm reports that BMS's dividend yield of 3.1% and valuation of 6.8x EV/EBITDA is certainly solid, but notes that it will remain on the sidelines until there is more visibility on volumes and the company's ability to offset the run up in petrochemical costs.
The company bought back 1.7 million shares in Q1, but Jefferies feels that it wont do much more ahead as management is keeping its focus on its investment grade rating and actively looking for potential M&A targets.
Jefferies comments that, "Historically, the specialty resins have been more stable than the commodity grades, but due to supply shortages and a surge in energy prices, resin across the board was up more than 15% during Q1. With the timing of the pass through generally longer for the specialty grades, coupled with the lengthier pass through from the Alcan business, Bemis will likely operate with a negative price cost spread until late Q3."
Jefferies is lowering its FY11 and FY12 EPS estimates from $2.37 and $2.70 to $2.17 and $2.50.
For more ratings news on Bemis click here and for the rating history of Bemis click here.
Shares of Bemis closed at $32.16 yesterday.
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