CIBC World Markets Inc. revised upwards its price target on Finning International Inc. (TSX:FTT.TO)
following the company's purchase of the former Bucyrus distribution and
support business from Caterpillar Inc. (NYSE: CAT) for around $465
million.
CIBC analyst Jeff Fetterly, who has a "Sector Performer" rating on
the stock, said "this is a strategic and meaningful acquisition for
Finning, albeit one that has been well telegraphed."
"While the realization of synergies is expected to take some time, in
our view it positions Finning to meaningfully benefit from robust
mining spend in coming years," Fetterly wrote in a note.
Fetterly also raised his 2013 EPS estimate on the stock to $2.65 from $2.38.
Caterpillar, which acquired Bucyrus for $8.6 billion last year, is
divesting the assets as part of its integration of Bucyrus.
Finning is engaged in the selling, servicing, and renting of heavy equipment, engines, and related products.
FTT.TO shares, which have
been trading in the 52-week range between $18.10 and $30.51, is trading
1.72 percent higher at $26.55 on Thursday.
