J.P. Morgan Maintains PGT Rating

PGT, Inc. PGTI reported 3Q Operating EPS of breakeven, “in-line with our estimate and slightly above the Street consensus of -$0.01,” J.P. Morgan. Relative to J.P. Morgan's estimates, higher gross margins accounted for $0.01/shr of upside, which was offset by $0.01/shr of downside from higher SG&A. “Sales rose 13.4%, solidly above our +4.5%E, and while gross margins of 30.9% were above our 30.0%E, this was more than offset by SG&A of 28.8%, above our 27.0%E, resulting in an operating margin of 2.1%, slightly below our 3.0%E,” J.P. Morgan writes. “We note that there were no charges this quarter. Overall, as FL housing starts have continued to improve, up 15% YOY following 2Q's 41% and 1Q's 39%, we view PGTI's strong sales increase, EBITDA of $4.7 million and operating cash flow generation of $4.3 million as relative positives.” J.P. Morgan said that it maintains its Overweight rating on shares of PGT, which currently trades at $2.15.