Milacron Holdings Corp. (NYSE: MCRN) has seen its post-IPO quiet period come to an end. The company makes engineered and customized systems for plastic technology and processing industries.
Milacron’s initial public offering was 14,285,714 shares of common stock at $20.00 per share, and all shares were sold by Milacron. The company granted its underwriters a 30-day option to purchase up to an additional 2,142,857 shares of common stock, but this pricing was actually at the low-end of its expected range and shares did not really do well after coming public.
Monday’s closing price was $16.97, which compares to a post-IPO range of $16.62 to $21.30. Milacron has a market cap just north of $1.1 billion. Milacron’s analyst coverage on Tuesday was as follows, with price target data included if available:
- Barclays started it as Overweight with a $25 price target.
- Bank of America Merrill Lynch started as Buy with a $23 price objective.
- Credit Suisse started it as Neutral with a $23 price target.
- Goldman Sachs started as Neutral rating and a $19 price target.
- JPMorgan started it as Neutral with a $20 price target.
- KeyBanc Capital Markets started it as Overweight with a $22 target.
- William Blair started it as Outperform.
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Credit Suisse’s report signaled that Milacron had a superior sales and earnings per share growth profile, but noted that it is in a challenging environment. The Credit Suisse Neutral rating and $23 were based on the following from that report:
The company has a superior organic sales growth profile relative to most of our EE/MI coverage as well as self-help driven by cost cutting and balance sheet deleveraging. These factors should enable a high teens earnings growth in the coming couple of years; however, we would prefer to see further evidence of operational execution as a public company, given the fairly high expectations embedded in our forecasts, and the current challenging demand environment.
Credit Suisse also noted that in the past three years Milacron has enjoyed a 4.5% organic sales growth against a peer average of approximately 2.5%. It was noted also that Milacron has 4% share in the $27 billion global plastics technology and processing industry.
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