Klöckner "overweight," target price raised

25.04.07 - J.P. Morgan Securities

LONDON, April 25 (newratings.com) - Analyst Anindya Mohinta of JP Morgan maintains her "overweight" rating on Klöckner & Co (KCO), while raising her estimates for the company. The 12-month target price has been raised from ?45 to ?52.

In a research note published yesterday, the analyst mentions that Klöckner is likely to have paid an above average multiple for the acquisition of Primary Steel. The consolidation of Primary Steel is expected to commence from 3Q07, and the asset has relatively higher EBITDA margins, the analyst adds. According to JP Morgan, Klöckner has the potential to make an additional large acquisition during 2008. The EPS estimate for 2008 has been raised from ?4.87 to ?5.29.