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UPDATE: Oppenheimer Upgrades McGrath Rentcorp (MGRC) to Outperform

August 12, 2020 6:29 AM EDT
Get Alerts MGRC Hot Sheet
Price: $97.67 +1.08%

Rating Summary:
    2 Buy, 2 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 0 | Down: 5 | New: 0
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(Updated - August 12, 2020 9:31 AM EDT)

(updated to add analyst comments)

Oppenheimer analyst Scott Schneeberger upgraded McGrath Rentcorp (NASDAQ: MGRC) from to Outperform with a price target of $74.00.

The analyst commented, "We recently attended investor meetings with MGRC's CEO/CFO following its extended record of quarterly outperformance in COVID-19 challenged 2Q20. We see the potential for 1H20 to represent a trough/3Q20 adj. EBITDA consensus of $59M (mid-point of $54-64M guidance) to prove conservative. Believing this could be a catalyst and viewing MGRC undervalued, we upgrade from Perform to Outperform and establish a $74 target. Our target anticipates MGRC's multiple expanding from 7.1x EV/EBITDA our 2021E adj. EBITDA of $242M (conservatively maintained at +5% y/y) to 8.2x, which is consistent with its three-year average. Appreciating MGRC's ROIC/FCF focus and management's caution in the current environment, we view the risk/reward profile of segment expectations/MGRC's stock price favorable."

For an analyst ratings summary and ratings history on McGrath Rentcorp click here. For more ratings news on McGrath Rentcorp click here.

Shares of McGrath Rentcorp closed at $63.41 yesterday.


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