From Standard & Poor's Equity Research
JP Morgan started covering Dynamic Materials (BOOM
) at overweight, explaining that the company offers exposure to rapid sales, earnings per share and cash flow growth.
Analyst Michael Gambardella says the company is already established as a dominant global player (35% to 40% share) in a niche industry with extremely high barriers to entry. He says the company has a strong balance sheet (net debt/cap ratio of -17%), good cash flow, and high operating margins. He thinks this should lead the company to EPS CAGR of 23% from 2005 to 2008. He adds that the company's record $42 million order backlog at year-end 2005 reinforces growth prospects. He sees $1.24 2006 EPS, $1.65 in 2007 and $1.95 in 2008.