Baird upgrades Actuant Corp. (ATU) to outperform from neutral.
Analyst Robert McCarthy says his upgrade is based on increased growth expectations for core business after first-quarter results handily beat his estimates. He notes an increasing comfort with Actuant's ability to manage integration of its Key Components acquisition.
He also cites a better appreciation of remarkable changes we could see in Actuant's balance sheet by fourth-quarter 2005. He raises $2.40 fiscal 2005 (ending August) earnings per share estimate to $2.55, and $2.70 fiscal 2006 to $3.10.
McCarthy raises his $48 target to $62 to reflect a higher 19 times target multiple applied to his revised calendar year 2006 earnings per share estimate.