Calgon Carbon Shares Surge on Upgrade, Expectations of Improved Margins
The Pittsburgh-based company's stock gained 37 cents, or 8 percent, to $5 on the New York Stock Exchange. Shares have traded between $4.15 and $8.69 over the past year.
Analyst Michael Gaugler said U.S. imposition of antidumping duties on all imports of Chinese steam activated carbon should aid industry pricing and boost profit at Calgon Carbon's largest segment.
In a research note, the analyst upgraded the company to "Buy" from "Hold," while boosting earnings estimates and establishing a price target for the stock at $6.
For 2006, Gaugler sees the company losing 20 cents per share, compared with a prior forecast of a 24-cent loss. Wall Street overall is looking for a loss of 18 cents, according to an analyst poll by Thomson Financial.
For 2007, Gaugler raised his per-share profit estimate by 10 cents to 23 cents. Analysts overall are looking for profit of 3 cents.
"We recommend investors build positions, particularly under the $5 level, in what we expect to be a much better 2007 for the company's financial performance," Gaugler wrote.
Calgon Carbon said Thursday that it estimates more than 80 percent of Chinese carbon currently exported to the United States will be subject to tariffs of 70 percent or higher under the new imposition.