11:01am EST 25-Mar-98 Furman Selz (Graboski, Diane 212-309-6418) GEHL
INDUSTRIAL MANUFACTURING GROUP
FARM EQUIPMENT INDUSTRY
GEHL COMPANY (NYSE: 21 5/8 -GEHL)
Initiating Coverage of Gehl Company as a "Hold"
Diane A. Graboski (212) 309-6418
Don A. San Jose (212) 309-6472
March 25, 1998
Rating: HOLD
52 Week Range $25 - 9 QUARTERLY EPS
Avg. Daily Vol. (000): 27.8 1996 1997 1998E 1999E
Shares O/S(mil.): 6.7 Mar $0.31 $0.39 $0.41 NA
Market Cap (mil.): $144.0 Jun $0.47 $0.60 $0.67 NA
Floating Mkt. Cap. (mil.): $129.6 Sep $0.42 $0.52 $0.60 NA
Avg. ROE on 1997A 17.1% Dec $0.34 $0.43 $0.47 NA
EPS Growth Rate: 10%
Debt/Total Cap.: 39.1% Year $1.54 $1.95 $2.15 $2.40
Book Value/Share: $13.69
Ind. Dividend: $0.00 P/E NA 11.1x 10.0x 9.0x
Yield: 0.0%
Insider Holdings: 10%
Note: Numbers may not add due to rounding
Why You Would Own Gehl Company: As one of the largest non-tractor farm equipment
manufacturers in North America, Gehl Company has only a single competitor that
competes in all of its farm product lines. Smaller players tend to compete on a
limited line of specialty items and in regional markets. On the construction
side, Gehl products fall into the category of light equipment and include skid
steer loaders and telescopic material handlers, which are growing more rapidly
than other segments of the construction equipment industry. The company's
debt-to-total capitalization ratio of 39% should enable Gehl to continue to make
acquisitions in its effort to broaden its existing product lines and increase
market share. Our price target for the GEHL shares is $24.
Company Description: Gehl is engaged in the design, manufacturing and
distribution of equipment used in the light construction and agricultural
industries. The company markets its construction equipment through a network of
336 independent dealers in North America and 64 distributors around the world.
Agriculture products, which primarily serve the dairy and livestock industries,
are sold through about 500 dealers in North America, and 31 dealers worldwide.
International sales account for 17% of total revenues. Aftermarket parts and
service make up close to 10% of total revenues.
Further information is available upon request. Stock is priced as of the March
24, 1998, close. |
