Jefferies & Co. Maintain Hold Rating for Dynamic Materials (BOOM)

Jefferies & Co. published a research report this morning, where analysts have maintained their “hold” rating on shares of Dynamic Materials BOOM. Analysts remain extremely cautious because of low capital spending expectations, which could negatively impact the total demand. Analysts expect for BOOM’s largest business segment, metalworking (EM), to only report a modest rebound in bookings. EM contributes roughly 75% of BOOM’s total revenues. Jefferies analysts said, “while we expect these markets to improve in 2011, the rate is likely to be slow as companies cautiously increase growth spending.” Analysts are sticking with their $0.30 EPS estimate for 2010, which is being driven by a decline in revenue. For 2011, analysts are trimming their EPS forecasts down to $0.80 from $0.90. Given this outlook, Jefferies believes that shares are fairly valued at the current price level, hence the “hold” rating. BOOM is currently trading at $16.26 and has been given a target price of $16.00.