UPDATE: UBS Downgrades ITT Corp. (ITT) to Sell
UBS downgraded ITT Corp. (NYSE: ITT) from Neutral to Sell with a price target of $36.00 (from $41.00).
Analyst Shannon O'Callaghan commented, "Orders in ITT's Industrial Process (IP) segment (46% of sales) are now running at ~$200M or an ~$800M annual run rate vs. estimated 2015 sales of ~$1.1B. This large gap between sales and orders stands in sharp contrast to recent years. We estimate 2015 orders will be down ~25% (estimated exit rate of -30%+) while sales will only be down 6% (-1% organic). IP is working through backlog, supporting 2015 sales. But we expect the recent order pressure to convert to sales pressure in 2016. While we expect IP margin support in 2016 from restructuring and mix (greatest pressure is in the lower margin project business), we think IP sales could be down ~25% in 2016, driving earnings pressure. We reduce our 2016 EPS estimate to $2.40."
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Shares of ITT Corp. closed at $39.58 yesterday.