Goldman Sachs Maintains Neutral Rating, $84 PT On SPW

Goldman Sachs said that it away from SPX Corporation's SPW 2011 outlook meeting continuing to believe in the long-term value appeal based on a turn in the power generation cycle, but also seeing a lack of near-term catalysts. “Initial 2011 EPS guidance of $4.20- $4.50 compared to GS/consensus of $4.90/$4.55, with organic revenue growth guidance of +2-7% vs. GS +7% and operating income margins of 7.4% at midpoint vs. GS 8.2%, with weaker Transformer pricing and mix key variances vs. our estimates,” Goldman Sachs writes. “We remain positive on SPW's late cycle appeal, but remain Neutral rated and maintain our $84 12-month target price (13.3X our 2012E EPS) as 6-12 month valuation upside is in line with our coverage average. We look to become more positive on improved valuation, or an acceleration in power generation orders and improved power transformer pricing.” SPX Corporation closed Wednesday at $75.13.