Klöckner "overweight," target price raised

14.05.07 - J.P. Morgan Securities

LONDON, May 14 (newratings.com) - Analyst Anindya Mohinta of JP Morgan maintains his "overweight" rating on Klöckner & Co AG (KCO), while raising his estimates for the company. The 12-month target price has been raised from ?52 to ?55.

In a research note published this morning, the analyst mentions that the company has redeemed its 10.5% high yield bond. The cost of debt estimate has been significantly reduced from an average of 7.0% to 4.75%. Klöckner has announced three acquisitions in Germany, which are likely to contribute sales of ?43 million this year, the analyst says. The EPS estimates for 2007 and 2008 have been raised from ?5.28 to ?5.80 and from ?5.29 to ?5.44, respectively.