Credit Suisse upgraded Black & Decker (BDK
) to outperform from neutral, explaining that the company has succeeded in confronting its competition during the past couple years.
Analyst Ivy Zelman says she had initially been concerned about the increased competition from Milwaukee and Home Depot brands. Also, she says channel checks indicate that power tool demand has held steady during the first quarter of 2006, with an especially strong March period. Further, new product launches set for the second half of 2006 remain on track. She sees these factors, along with the cash-flow-rich business, providing ample opportunity to pursue accretive acquisitions or aggressive share buybacks. She raises her $7.35 2006 earnings per share (EPS) estimate to $7.45 and sees $8.07 in 2007.