Deutsche Bank has raised its recommendation for Makhteshim Agan Industries Ltd. (TASE: MAIN) to “Buy” from “Hold” and raised its target price to NIS 28 from NIS 23. The new target price reflects a 20% premium on the share.
Deutsche Bank cites Makhteshim Agan’s investment in new products and penetration into new markets, as well as the positive results of the company’s streamlining plan. The bank adds, “The uncertainty that plagued MAI in the last few months due to a challenging market environment, change in ownership, and management transition has subsided, in our view.”
Deutsche Bank predicts stable demand for Makhteshim Agan’s products in 2007, mainly on the basis of demand for agricultural chemicals and rising prices. The bank predicts that the company’s earnings before interest, taxes, depreciation and amortization (EBITDA) and profit margins will improve.
Deutsche Bank says it had the opportunity to meet Makhteshim Agan chairman and proposed new CEO Avraham Bigger. “We came away impressed by his clear focus on execution, balance between short-term needs and long-term direction, and challenge of underlying business processes.” On the basis of this meeting, Deutsche Bank said, “It is our impression that MAI’s strategic direction will not alter radically under Mr. Bigger, though we anticipate a more aggressive approach. Concrete measures that we see as likely include hastening the introduction of new products, penetrating new markets and support for strategic M&A moves.”
Published by Globes [online], Israel business news - www.globes.co.il - on December 20, 2006
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