Kloeckner "buy," target price raised

16.04.07 - Deutsche Bank

LONDON, April 16 (newratings.com) - Analysts at Deutsche Bank maintain their "buy" rating on Kloeckner & Co (KCO), while raising their estimates for the company. The target price has been raised from ?50 to ?57.

In a research note published this morning, the analysts mention that the company is acquiring US-based Primary Steel. The acquisition would be significantly accretive to EBITDA margins and is likely to result in synergies, the analysts say. The upward revision in the target price reflects an expansion of peer multiples and a shift in the base year, Deutsche Bank adds. The EPS estimates for 2007, 2008 and 2009 by 11%, 6% and 7%, respectively.