Sterne Agee Maintains “Buy” Rating for Precision Castparts; Boosts Price Target Following Acquisition of Titanium Metals (PCP, TIE)

Metal manufacturer Precision Castparts Corp. (PCP) received a boost in price target from analysts at Sterne Agee on Monday after its agreement to acquire Titanium Metals Corporation (TIE).

The analysts maintained its “Buy” rating for PCP, but raised the price target from $190 to $217. The new target is a +26.7% upside to Friday’s closing price of $171.33.

Sterne Agee noted, “PCP has entered into a definitive agreement to acquire Titanium Metals Corporation (TIE, $11.57, NR) for $16.50 per share in cash. The transaction sets TIE’s total enterprise value at ~$2.9 billion. The acquisition is very strategic and will now allow PCP to become vertically integrated for titanium, which is the second most used material within PCP’s products behind nickel alloys. We expect significant synergies and we are raising our estimates and price target.”

Precision Castparts share were up $8.67, or +5.06%, in premarket trading on Monday. Titanium Metal shares were up $4.99, or +43.13%.

The Bottom Line
Shares of Precision Castparts (PCP) have a .07% dividend yield, based on Friday’s closing stock price of $171.33. The stock has technical support in the $165-$170 price area. The shares are trading near all-time highs.

Precision Castparts Corp. (PCP) is not recommended at this time, holding a DARS™ Rating of 3.4 out of 5 stars. Titanium Metals Corp. (TIE) is not recommended at this time, holding a DARS™ Rating of 2.9 out of 5 stars

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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