Piper Jaffray Boosts Estimates, Price Target On McGraw-Hill Companies

Piper Jaffray is boosting its estimates and price target for McGraw-Hill MHP based on recent strength in new debt issuance volumes. Given strength in 1Q 2011 new debt issuance volumes, Piper is modestly boosting its estimates for MHP. Piper's 2011 EPS estimate goes to $2.91 from $2.90 and 2012 EPS estimate is unchanged. It now looks for 1Q EPS of $0.38 (consensus is $0.37), up from a prior estimate of $0.37. Piper Jaffray is raising its price target for MHP as it rolls forward to use 2012 estimates. The $49 price target assumes 15x 2012E EPS of $3.25. Piper notes that its 15x target multiple compares with an 18.9x 10-year average, suggesting that its price target could prove conservative, particularly if it continues to see positive momentum in estimate revisions. MHP closed Wednesday at $39.58