Opportunity In Foster’s (FWLT) Management Transition

Foster Wheeler’s (NASDAQ: FWLT) announcements on management transition and operational relocation may come as a surprise but Barclays thinks any related pullback should be viewed as a buying opportunity.

Robert Flexon is slated to succeed the current CEO Milchovich in January and the operational headquarters are to be relocated to Geneva, Switzerland, from New Jersey. In addition, COO Umberto della Sala’s tenure was extended to 2013.This move is possibly aimed at protecting the lower tax base and being closer to clients, since 85% of Foster’s sales come from international clients. The upside potential of nearly 40% is reflected in the price target of $40.