Zacks Investment Research upgraded shares of Gibraltar Industries Inc. (ROCK) from UNDERPERFORM to NEUTRAL on August 20, 2013, with a target price of $14.00.
Gibraltar Industries reported mixed results for the second quarter of 2013, with adjusted earnings decreasing 7.1% year over year to $0.28. Revenues, however, increased 2.2% year over year to $224.5 million. The increase in revenues resulted from the various acquisitions undertaken by the company, which were offset by a decline in the organic growth. Gibraltar Industries intends to have surplus cash in its balance sheet, to be utilized for acquisitions and further growth of the company. It recently redeemed its high-interest bearing notes with lower interest rate notes in January this year, in order to reduce costs and increase profits. Moreover, the company also forecasts a hike in its multi-family building and repair and remodeling markets in the coming quarters. Based on the above, we upgrade our recommendation on the stock from Underperform to Neutral. However, the company's dependence on others' spending makes it prone to sales fluctuations, supported by the fact that the company lacks long-term relationships with its customers. Also, Gibraltar Industries' worldwide presence makes it susceptible to foreign currency risks, as well as economic and political risks of the nations.
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