Ply Gem Holdings (PGEM) Neutral Rating Reiterated at Goldman Sachs

Goldman Sachs maintained a Neutral rating on Ply Gem Holdings (NYSE: PGEM) and trimmed its price target to $12.50 (from $13.00). Comments follow Q1 results.

Analyst Eli Hackel said, "We are updating our estimates for Ply Gem following their 1Q earnings results. Coming out of the quarter, it is clear weather had a large impact on results and it was nice to see some progress in the windows business. With that said, the Ply Gem story has unfolded much more slowly than we would have expected, driven both by end market and company-specific factors. We expect the company to generate some, but limited, free cash flow this year but net debt could end the year at over 5X and may take until 2017 to get under 3X on our current estimates."

"We remain Neutral on the shares and continue to favor names within our building products coverage with higher exposure to non-residential construction. Ply Gem is making progress on improving its operating results, but also trades at close to 10X 2015 EV/EBITDA vs. peer average of around 8X," he added. "Going forward we are focused on continued improvement in windows profitability, what type of recovery we see as we move into the summer months for exterior building products, and continued debt reduction," he added.

For an analyst ratings summary and ratings history on Ply Gem Holdings click here. For more ratings news on Ply Gem Holdings click here.

Shares of Ply Gem Holdings closed at $12.15 yesterday.

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