UBS Raises Valspar (VAL) Price Target To $29

UBS analyst Don Carson maintained his Neutral rating for shares of Valspar Corp. (NYSE: VAL) and increased his price target from $28 to $29.

Carson noted that Valspar Corp. reported earnings per share of 32 cents, well above the UBS estimate of 23 cents per share and the Wall Street consensus of 28 cents per share.

Sales were 5% above expectations and the total operating margin of 9.5% was 200 bps above expectations.

Carson said that, "We raised our F2010 EPS estimate by $0.10 to $2.10 and our target to $29 (based on 14x 2010E EPS) from $28. VAL’s current 13.3x forward P/E is at the lower end of its historical range (12-17x), though we were surprised that VAL did not raise guidance given the beat. That combined with rising raw materials, the sluggish industrial volumes, and fair valuation all lead us to maintain our Neutral rating."

Valspar shares closed at $27.80 on Thursday.