Credit Suisse Upgrades Chicago Bridge & Iron (CBI) to Outperform Amid Nuclear Sale; Sees 30% Upside

Credit Suisse upgraded Chicago Bridge & Iron (NYSE: CBI) from Neutral to Outperform with a price target of $51.00 (from $45.00) on the Nuclear sale.

Analyst J. Cook commented, "CBI entered into an agreement with WEC, in which WEC will acquire all outstanding equity in CBI's nuclear business, in particular the Vogtle and Summer projects, as well as the China projects. Assuming very healthy profit margins (10% which was unlikely in our opinion, CBI loses ~$1.00 of earnings each year over the next five years. This implies EPS in 2016 of ~$4.45 post the transaction vs. our estimate of $5.45 including the nuc. biz, In our opinion, CBI will receive a multiple in line with the group as the company is now significantly de-risked. If we assume 11.5x on the $4.45 EPS ex. the nuc jobs, this implies a $51 stock or 30% upside. We upgrade the stock to Outperform."

For an analyst ratings summary and ratings history on Chicago Bridge & Iron click here. For more ratings news on Chicago Bridge & Iron click here.

Shares of Chicago Bridge & Iron closed at $38.96 yesterday.

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