J.P. Morgan Sees Upside Potential In BZ From Several Catalysts

J.P. Morgan reports that as a result of last week's special dividend, “the resolution of the pending warrant overhang has now effectively been accelerated to May 4th from June 18th, quickly moving the Boise Inc. BZ story from technicals to fundamentals.” “We see upside potential from several catalysts ahead: the warrant resolution, the resulting capital allocation and a potential containerboard machine conversion, all of which could shift the portfolio even more toward higher multiple packaging assets (from lower multiple paper),” J.P. Morgan writes. “Even without these catalysts, valuation is compelling (sum of the parts, EV/EBITDA, FCF Yield). BZ remains our top pick.” Boise closed Monday at $8.71.