Oppenheimer Upgrades Roper Industries (ROP) to Outperform
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Oppenheimer analyst Christopher Glynn upgraded Roper Industries (NYSE: ROP) from Perform to Outperform with a price target of $460.00.
The analyst comments "We are upgrading shares to Outperform and establishing a $460 PT; represents 25x our '22E FCF/share ($18.32), a modest premium to current 23x '21E FCF/share, supported by planned ~$1.5B debt reduction during 2021 and resuming deal activity into 2022. Acquisitions should reasonably afford 5% pro forma '22E FCF accretion vs.
current estimates; +10%-plus '23E PF FCF growth (organic model with modest deal flow). Our PT reflects 4.6% target FCF yield on 2023 PF vs. current 4.5% median yield for our coverage on '22E; by comparison, affords view of relative headroom on our new ROP PT. ROP has executed just over 13% FCF CAGR across 5-/10-/15-year periods through 2020, with rising FCF and EBITDA margins and rising FCF/EBITDA conversion. ROP invested $6.0B into 2020 acquisitions."
Shares of Roper Industries closed at $387.98 yesterday.
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