Zacks Investment Research upgraded shares of L.B. Foster Company (FSTR) from UNDERPERFORM to NEUTRAL on April 17, 2013, with a target price of $44.00.
We are upgrading our recommendation on Foster from Underperform to Neutral based on the expectation of improved prospects in the construction and other segments of the company in 2013. A strong balance sheet coupled with Foster's plans to increase its capital spending for innovation and growth seems motivating. A high backlog that the company holds is also likely to boost the 2013 revenue. Foster also reported 14% and 5% improvement in earnings per share and revenue that came in at $0.65 and $140.7 million, respectively in the fourth quarter 2012. Both the results, however, missed the Zacks Consensus Estimate. The results were impacted by lower revenue from the construction segment of the company. The presence of many players in the industry also endangers the company's growth prospects. Moreover, Foster's over dependence on steel as its core raw material, given the cyclical nature of the industry adds to the worries. A negative revision of spending by public and private institutions on various projects impacts the revenue of the company.
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