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Deutsche Bank Reiterates On Masco, Notes Little Progress In Break-Up Value

Nick Lazich

Deutsche Bank Tuesday reiterated its Hold rating on Masco (NYSE: MAS) and maintained its $22 price target.

Deutsche Bank analyst Nishu Sood said the reasoning for the Hold rating was, "Our sum-of-the-parts analysis finds that there is value lost, with roughly $27/share of break-up value. Furthermore, if a break-up drove lagging segments' margins in line with peers' it would yield a total of $33/share. While this value potential is compelling, we don't currently see a path to it; hence, we maintain Hold."

Sood maintained the $22 price target, stating, "While the potential value creation documented in our sum-of-the-parts is significant, it remains more a theory than likely outcome, in our view. We note that Masco's break-up value has been discussed for many years, with little progress in that direction. Thus, we continue to value Masco $22/sh via our DCF and EV/EBITDA methodologies."

Masco shares were last trading up 1.78 percent to $21.75.

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