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Fly News Breaks for July 16, 2018
ARNC
Jul 16, 2018 | 07:47 EDT
After The Wall Street Journal reported that Arconic has received "expressions of interest" from a number of private-equity firms, Morgan Stanley analyst Rajeev Lalwani said two things stand out to make Arconic a plausible LBO candidate: its low EV/EBITDA multiple and its a cash flow profile, which has room for improvement. While the reported private equity interest "adds a level of intrigue," Lalwani still believes headwinds within it rings and disks business, working capital and capex issues and volatility associated with aluminum prices will be the key driver of shares in the near-term. Given the aforementioned execution concerns, Lalwani keeps an Equal Weight rating and $20 price target on Arconic shares, which are up 12% to $19.53 in pre-market trading.
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