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EnPro rises as co. cuts liability claims estimate

NEW YORK (AP) -- Shares of EnPro Industries Inc. rose to an all-time high on Wednesday as the industrial products maker said that the estimated liability for pending and future asbestos-related claims is lower than initially expected.

THE SPARK: On Tuesday EnPro said that its subsidiary, Garlock Sealing Technologies LLC, filed a pre-trial brief that estimates the net present value of its expected legal liability for current and future mesothelioma claims is no more than $125 million. This is less than half of the $270 million initially anticipated by the company in November 2011.

GST, which had filed for Chapter 11 bankruptcy protection in June 2010, also said in the brief that it will show that it has little or no responsibility for the claims that have been or will be made against it.

Mesothelioma is a rare cancer of the lung lining caused by exposure to airborne asbestos fibers.

GST said that the claimants want $1.26 billion, based on an estimate provided by experts hired by the claimants. GST's estimate is from Charles Bates of the economic consulting firm Bates White LLC.

The trial is expected to start on July 22 in the U.S. Bankruptcy Court for the Western District of North Carolina in Charlotte, N.C.

EnPro makes sealing products, bearings, components and service for compressors, diesel and dual-fuel engines and other engineered products for industrial use.

THE ANALYSIS: Todd Vencil of Sterne, Agee & Leach said in a client note that the approximately $1.3 billion the claimants are asking may put some investors' minds at ease, as it is likely the highest amount for which the court might rule. The analyst also said that the midpoint between GST's $125 million estimate and the claimants' approximately $1.3 billion estimate comes to just over $700 million, which is within the range Vencil projected.

The analyst maintained the company's "Buy" rating and $61 price target.

A representative for EnPro did not immediately respond to an email seeking comment.

SHARE ACTION: EnPro's stock gained $2.40, or 4.5 percent, to $55.44 in afternoon trading. The shares touched $56.55 earlier in the session, an all-time high. The stock is up 30 percent for the year to date.