FBR Capital analyst William Bird trimmed his price target on Outperform-rated McGraw Hill Financial (NYSE: MHFI) to $111.00 (from $115.00), saying the "pricey" deal for SNL Financial upstaged a solid quarter.

Bird commented, "The shares of MHFI have sold off sharply on the pricey acquisition of SNL Financial. Though the high purchase price is tough to defend, the stock reaction seems exaggerated. We believe the acquisition likely prompts selling by event-oriented accounts who were looking for a large buyback. Also, near-term upside to estimates may be curtailed by deal dynamics (i.e., buyback blackouts, up-front costs, new debt). Separately, despite $0.05 to $0.07 of deal dilution, 2015 guidance of $4.35 to $4.45 was affirmed and 2Q results were solid, besting the Street by $0.07 and supportive of the thesis of margin expansion potential. We are lowering our 2016 estimate to reflect $0.15–$0.20 of SNL deal dilution, and our new price target is $111 (previously $115)."

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Shares of McGraw Hill Financial closed at $105.58 yesterday.

Analyst Comments Analyst EPS Change Analyst EPS View Analyst PT Change

Piper Jaffray Cuts Price Target on McGraw Hill Financial (MHFI) to $114 Following 2Q EPS Beat July 28, 2015 9:05 AM McGraw Hill Financial (MHFI) Tops Q2 EPS by 14cJuly 27, 2015 7:33 AM McGraw Hill Financial (MHFI) to Acquire SNL Financial in ~$2.23B DealJuly 27, 2015 7:32 AM McGraw Hill Financial Reports Second Quarter ResultsJuly 27, 2015 7:31 AM McGraw Hill Financial to Acquire SNL FinancialJuly 27, 2015 7:30 AM