Graco Rises After Analyst Upgrades Stock

MIKE OBEL

NEW YORK (AP) — Graco Inc. rose Friday after an analyst hiked his rating on the fluid control equipment maker's stock on expectations of an improving market plus a recent price decline that left shares "fairly valued."

Goldman Sachs analyst Mark Zepf, who raised his rating to "Hold" from "Sell" and increased his price target to $21 from $15, said the "potential for further margin deterioration appears less likely given signs of macro stabilization."

Since being placed on Goldman Sachs' Americas Sell List on Feb. 25, the stock has fallen 42.2 percent compared with 37.6 percent for its peers, he said in a client note.

"While shares appear fairly valued, potential for further margin deterioration appears less likely given signs of macro stabilization."

Zepf also said Graco's "order rates are likely near bottom." On March 18, the company reported its year-to-date order rate was down 40 percent.

Further, dollar strength should moderate over the next few quarters, the analyst said.