Guggenheim Issues a Buy Rating on Belden Inc

By Jason Carr

In a report released yesterday, Rob Cihra from Guggenheim assigned a Buy rating to Belden Inc (NYSE: BDC), with a price target of $90. The company’s shares opened today at $82.29.

Cihra said:

“We continue to forecast Q4E showing relatively even ~6%Y/Y growth across each business but its strongest +8%Y/Y growth from Industrial networking (which we continue to consider Belden’s biggest swing-factor from -3%Y/Y in FY16 and -12%Y/Y back in FY15). CFO, Henk Derksen, outlined Belden’s 3yr FY17-20E financial goals including a Revenue CAGR of 5-7%, EBITDA margin of 20-22% (up from previous 18-20% targets), FCF CAGR of 13-15% and ROIC of 13-15%. Capital allocation priorities include a slightly increased 20% for organic investments (e.g., currently spending $15mil capex to expand its manufacturing footprint in India), 25% for share repurchases + dividends, and a slightly decreased 55% for M&A. Belden says it continues to have “excess cash” of $475mil and is pursuing a number of M&A opportunities, with the dry powder for inorganic growth.”

According to TipRanks.com, Cihra is a 4-star analyst with an average return of 8.5% and a 58.2% success rate. Cihra covers the Consumer Goods sector, focusing on stocks such as Hewlett Packard Enterprise, Samsung Electronics, and BlackBerry Limited.

Currently, the analyst consensus on Belden Inc is Strong Buy and the average price target is $91.50, representing an 11.2% upside.

In a report issued on November 30, Canaccord Genuity also assigned a Buy rating to the stock with a $94 price target.

Based on Belden Inc’s latest earnings report for the quarter ending September 30, the company posted quarterly revenue of $622 million and quarterly net profit of $1.03 million. In comparison, last year the company earned revenue of $601 million and had a net profit of $35.65 million.

Based on the recent corporate insider activity of 35 insiders, corporate insider sentiment is negative on the stock.

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Belden, Inc. engages in the provision of innovative signal transmission solutions. Its comprehensive portfolio of signal transmission solutions provides industry secure and reliable transmission of data, sound and video for mission critical applications.