Monday, KeyBanc Capital downgraded Airgas Inc. (ARG) shares to Hold from Buy.
Analyst Michael Sison noted that Airgas is one of the most consistent growth companies in the specialty chemical sector with good certainty that growth would accelerate heading into an industrial economic recovery. With that said, the analyst downgraded his rating on ARG to Hold given the recent offer by Air Products and Chemicals (APD) to acquire ARG for $60.00 per share.
The analyst's prior price target was $55.00 and at roughly $61, the stock is trading at an estimated fiscal 2011 EV/EBITDA multiple of 9.2x. While the analyst believes APD would have to raise its bid to better reflect ARG's growth potential, he believes the risk/reward profile at currents levels warrants his Hold rating at this time.
The analyst believes ARG can return to mid-teens annualized EPS growth through fiscal 2013, as the company heads out of this downturn. Including acquisitions, the analyst believes earnings power for ARG could approach $4.50 per share by fiscal 2013.
Currently, ARG is down $0.11 or 0.18% and trading at $60.85.
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