Forterra Inc Gets a Buy Rating from Oppenheimer

By Austin Angelo

Oppenheimer analyst Ian Zaffino reiterated a Buy rating on Forterra Inc (NASDAQ: FRTA) today and set a price target of $21. The company’s shares opened today at $16.55.

Zaffino noted:

“FRTA beat 1Q17 revenue forecasts ($338.3M, vs. our $335.5M estimates), but significantly missed on adjusted EBITDA ($11.9M, vs. our/Street’s $33M/$34M). The miss was driven by: 1) ~$4.6M of out-of-period costs, 2) ~$4.4M of professional fees to implement cost-saving plan, and 3) a combination of higher raw materials, price declines in Houston drainage, and pressure pipe project delays. Management is encouraged by its top-line and long-term outlook and reiterated plans to improve operating margins by 400bps through 2019. It expects 2Q17 adjusted EBITDA of $50M-$60M, vs. our original $93.9M, to account for higher costs related to the margin expansion program and residual weather effects. FRTA expects 2H17 to be in line with previous expectations.”

According to TipRanks.com, Zaffino is a 4-star analyst with an average return of 5.0% and a 58.8% success rate. Zaffino covers the Services sector, focusing on stocks such as Macquarie Infrastructure Company, Bristow Group Inc, and Houghton Mifflin.

Currently, the analyst consensus on Forterra Inc is Strong Buy and the average price target is $22.33, representing a 34.9% upside.

In a report issued on May 12, RBC Capital also reiterated a Buy rating on the stock with a $23 price target.

The company has a one year high of $22.76 and a one year low of $13.81. Currently, Forterra Inc has an average volume of 222.2K.

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Forterra, Inc. manufacturers and sales pipe and precast products. It provides critical infrastructure components for a broad spectrum of construction projects across residential, non-residential and infrastructure markets. Forterra operates through the flowing segments: Drainage Pipe & products, Water Pipe & products and Bricks. The company was founded in 2005 and is headquartered in Irving, TX.