Credit Suisse Upgrades Buckeye Technologies to Outperform (BKI)

Credit Suisse is out with its report today on Buckeye Corp. BKI, upgrading BKI from Neutral to Outperform. In a note to clients, Credit Suisse writes, "We Underestimated the High End Pricing Strength: Buckeye Technologies reported EPS from continuing operations of $0.50, besting our $0.42 estimate, although 5-cents of this outperformance was due to an unanticipated insurance settlement related to the outage during the summer. However, the major news was that Buckeye was able to secure an unprecedented 17% average net price increase in its specialty dissolving pulp business, causing our earnings estimate (on an ongoing operating basis) to nearly double for fiscal (June) 3Q 2011 vs. fiscal 2Q results. After the strong fiscal 2Q, and confirming that BKI is getting a 17% average price increase in its high-end dissolving grades, we are upgrading the shares of Buckeye to Outperform (from Neutral) and also raise our target price by $12 to $32 per share. We are raising 2011/2012/2013 estimates to $2.10/$3.00/$3.20 from $1.60/$2.05/$2.25 respectively." Shares of BKI are trading today at $26.05, up 3.74% from Wednesday's close.