Ahead Of The Bell: Altra Holdings

HARTFORD, Conn. (AP) — Altra Holdings Inc., which makes brakes for elevators and wheelchairs, is poised to boost earnings as its markets improve, an analyst said Tuesday.

Yvonne Varano of Jefferies & Co. upgraded the Braintree, Mass., company to "Buy" from "Hold." Varano nearly doubled her price target on Altra, to $15 from $8.

In premarket trading on Tuesday, shares of Altra advanced 20 cents to $11.22.

In a note to clients, Varano said she anticipates improvements in Altra's markets and that the company's shares, trading below the average of similar companies, are undervalued.

"We would look to own (Altra) shares at this point in the cycle as we anticipate end market improvement to which earnings are highly levered," Varano said. "We believe that the shares of (Altra) are trading at a deeper discount to their peer group than is justified."

Altra's competitors include such companies as Actuant Corp., Ametek Inc., Baldor Electric Co., Kaydon Corp. and Regal-Beloit Corp., Varano said.

She expects sales for the next few quarters to remain relatively weak as compared with last year. But indications are that markets are improving in North America, Europe and Asia, she said.

"This should all bode well for driving stronger sales growth in 2010 and beyond," Varano said.

She believes her forecast of a 7 percent increase in sales for 2010 could be conservative if the market rebounds faster than expected.

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