Imperial Capital Starts Nortek (NTK) at In-Line

Imperial Capital initiates coverage on Nortek (NASDAQ: NTK) with a In-Line rating and a price target of $81.00.

analysts Jeff Kessler and Saliq Khan commented, "With several initiatives underway that we believe could change the face of the company for the better; Nortek plans to focus on execution over the next 12 to 18 months. While housing starts and building permits are still major drivers for the business, increasing technology upgrades in building security and control, and HVAC and other engineering-related products should drive revenues over the next few years. Nortek is in the middle of a major cost efficiency program, which if successful, could generate a cost savings run rate of $48mn–60mn by FY16. However, recent cautious statements regarding business drivers by management on its 2Q14 earnings conference call support our In-Line rating on the shares. Many of Nortek’s products in air flow and security already or could potentially fit into the connected, and networked premises, which could increase the consistency and the value proposition of the business. However, we would be more positively inclined toward the shares if 1) the company can maintain a good growth rate and increasing margins in its “TECH” (mainly security products) division, 2) stem the losses at its Audio-Video division, and 3) execute on its business efficiency and cost reduction programs."

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

Shares of Nortek closed at $73.94 yesterday.

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