8:52 am Xtant Medical initiated with a Buy at Maxim Group; tgt $2
Maxim Group initiates XTNT with a Buy and price target of $2. With a product portfolio formed by the union of Bacterin and X-spine, firm believes XTNT's competitive advantage lies in its ability to comprehensively treat orthopedic cases with both biologics and fixation hardware solutions. The orthopedic market presents a multi-billion dollar opportunity; capturing just 5% market share would represent almost $450M in revs, from under $100M in 2016E. XTNT's defensible proprietary technologies are protected by a rigorous portfolio of patents and trademarks that should ensure their exclusivity for years to come. Firm believes newly appointed Pres., Mr. O'Connell, is an important hire for XTNT. Also, they feel the supply issues that caused a slight decline in 1H16 revs are resolved. However, the $128M debt burden is a concern, but they believe XTNT is actively attempting to restructure it.
8:52 am AZZ downgraded to Sell from Hold at Stifel
Stifel downgrades AZZ to Sell from Hold and lowers their tgt to $57 from $63 as they believe that the valuation has become extended, particularly given their view that upcoming F3Q results could fall short of investor expectations. They also believe that a continuation of the F2Q volume challenges into the 3Q will reign in investor ebullience and bring focus back to the next 12 month outlook, driving multiple compression. Combined with what they anticipate will be downward revisions to earnings, they see meaningful downside to shares at current levels.
8:52 am Ferrellgas Partners upgraded to Sector Perform at RBC Capital Mkts; tgt lowered to $6
RBC Capital Mkts upgrades FGP to Sector Perform from Underperform on more appealing valuation, and lowers their tgt to $6 from $11. FGP's 80% distribution cut should allow de-levering, even with warmer start to winter (but trending colder). Debt reduction closer to 5.0x by FYE19 but covenants are tight near-term (which keeps lid on valuation expansion, in firm's view). They lower PT to $6 (from $11), which implies ~8.5x 2017E EBITDA multiple vs. 5-yr average of 10x.