) to overweight from neutral.
Analyst Curt Woodworth said the company's organic growth rates in the Water segment should accelerate in 2006, in his view. He noted that due to market share losses in filtration, and lost business at Franklin Electric, the company experienced weak organic growth in the Water segment in 2005. He says he looks for continued margin improvement in the Water and Enclosures business to drive 20% earnings per share growth. He believes valuation is very attractive, at 14.0 times 2006 p-e and 11.8 times in 2007, while the free cash flow yield reinforces his view. He cut his $2.30 2006 earnings per share estimate to $2.20 to account for 12 cents of options expense, and also set his $2.60 2007 earnings per share estimate.