Jefferies Cutting Price Target On Gibraltar Industries

Jefferies & Co. cut its price target on Gibraltar Industries

to $13 from $16, but is keeping its Buy rating on shares. In a note sent to clients, Jefferies writes, "We believe the company is poised to generate operating leverage through any level of recovery in US construction markets. Management estimates the company's overall breakeven point at $650-$670 mil in annual sales with current capacity of $1.3 bil in sales without capital investment. We estimate the company's current capacity utilization near 55%. We expect the company to manage the relationship between raw material costs and product prices well in the current weak demand environment. The company's multi-year investment in ERP systems and cost cuts helped reduce the breakeven point as operations improve efficiency in production planning, supply chain management, working capital, and logistics." Shares of ROCK lost 14 cents yesterday to close at $10.73.