Credit Suisse Rating and Target Price Changes

Credit Suisse initiated coverage of Quality Distribution QLTY with a Neutral rating and a price target of $13. Credit Suisse named two reasons for its decision. The report states, "Our Two Main Arguments for Initiating with Neutral Are as Follows: 1) Leverage Profile. At just under 5-times debt to LTM EBITDA, Quality is a highly levered company. Such a profile can work out well for equity holders, especially if cash flow is used for debt repayment. But in this case, we think QLTY will funnel its cash to acquisitions, making for a riskier profile for equity holders. 2) Healthy Market Implied Growth Rate. We believe that the stock is already priced for 7% EBIT growth (on a 3-to 5 year view), which is a fair-to-full assumption, in our view, leaving less room for upside." On Wednesday, Quality Distribution ended the day at $11.07. Credit Suisse also raised its estimates on Marathon Oil Corp MRO. At the moment, Credit Suisse has an Outperform rating and a price target of $65 on the company's stock. The report states, "we raise EPS by c4% to $6.26 in 2012 and c6% to $8.18 in 2013. Theoretically, our target price should increase by around $2/sh, but we leave it unchanged, awaiting improved valuations in the downstream." On Wednesday, Marathon Oil Corporation ended the day at $52.65.