Zacks Investment Research upgraded shares of Universal Forest Products Inc. (UFPI) from UNDERPERFORM to NEUTRAL on April 22, 2013, with a target price of $40.00.
Universal Forest reported one of the finest first quarters in its history. The company's EPS came in at $0.26, up 24% y/y and way above the Zacks Consensus Estimate of $0.01. Universal Forest's revenue too soared 21% on the back of very fine performance in its five market segments. Unit sales increased 2% while prices rose by 19% in the quarter. Going forward, management looks forward to improving its top-line growth through additions of new customers and products to its portfolio. Moreover, the recent acquisitions of Nepa Pallet and Custom Caseworks have strengthened the company's foothold in Northwest United States and industrial business, respectively. Additionally, Universal Forest's efforts to curb costs in order to maintain an optimum cost structure are expected to work in favor of the company. The recently approved semiannual dividend points to the company's policy of rewarding its shareholders. Thus, we have upgraded our recommendation on Universal Forest from Underperform to Neutral.
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