J.P. Morgan Upgrades PH To Overweight, Raises PT To $97

J.P. Morgan is raising its YE 2011 PT on Parker-Hannifin Corporation PH to $97 and is upgrading its rating on the stock to Overweight from Neutral. “In addition, if history is any predictor, we expect investors to rotate out of high-beta cyclicals into more diversified, lower beta names such as PH-- as is typical at this point in the cycle,” J.P. Morgan writes. “At 14.2x CY'11 EPS PH is trading at a discount to the average for diversified industrial stocks of 16.1x CY'11 EPS and also at a discount to historical peer average multiple of ~16.4x. “We believe that PH should trade inline with its peers and as a result, we are raising our year-end 2011 price target from $81 to $97 which represents a forward P/E mid-cycle multiple of 15x on our revised CY'12 estimate of $7.08, discounted back to YE 2011.” Parker-Hannifin Corporation currently trades at $88.43.