NEW YORK Global
Brass & Copper Holdings Inc.s (GBCs) stock is
up about 10 percent since its initial public offering (IPO) in
May, and Morgan Stanley Research analysts expect the
companys share price and earnings to improve through 2014
on the back of an overall improvement in end markets such as
housing and automotive.
GBC had hoped to raise
$172.5 million with the IPO, which began trading May 23 at $11
per share, to settle some debt and fund potential future
amm.com, May 31). A GBC spokesman said the company
was in a "quiet period" and could not comment until it releases
its second-quarter results in August.
GBC stock ended last
week at $14.89 per share on the New York Stock Exchange, up
from $13.55 at the close May 23.
analysts estimated that the Schaumburg, Ill.-based
companywhich owns copper product producers Olin Brass
Corp. and Chase Brass & Copper Co. LLC, as well as
distributor A.J. Oster Groupwill generate earnings of
$119 million this year.
"We view the stock as
an attractive value play on U.S. domestic growth, particularly
in housing and autos," Morgan Stanley said in a report,
estimating that 50 percent of GBCs products will be
shipped to the housing and the auto industries.
Morgan Stanley expects
982,000 housing starts this year, rising to 1.21 million next
year, and production of 16 million vehicles, climbing to 16.5
million in the same comparison.
GBC also could be
positively impacted by other growth opportunities in the copper
industry, Morgan Stanley said, including anti-microbial
products, lead-free brass products and the possibility of the
issue of a $1 coin.
GBC also is a major
player in the ammunition market, with about 20 percent of its
shipments going to that sector, although possible legislation
restricting the private use of firearms as well as military
budget cuts could be have a negative influence, the analysts