Arconic's (ARNC) Lack Of Detail On Strategic Plan Drive PT Cut To $17 At Cowen
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Cowen analyst, Gautam Khanna, reiterated his Market Perform rating on shares of Arconic (NYSE: ARNC) and cut his price target to $17 from $20 after the company reported mixed Q4 operating results with strong FCF but a weak operating margin. Perhaps more importantly, while management did outline a plan to separate EP&S from GRP, it omitted critical information that leave investors wanting detail.
The analyst stated "ARNC didn't quantify the cash separation costs (although, CEO Plant hopes it will cost less than the AA/ARNC separation), the targeted capital structures of each entity, including the allocations of pension, the FCF of each entity and ongoing capital needs of each, and ARNC offered no granularity on what will determine which segment is Spinco vs. Remainco, and relatedly, whether either entity can be spun/acquired without negative tax consequences".
Shares of Arconic closed at $17.42 yesterday.
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