LandAmerica Sets High on Analyst Note
April 6, 2007
AP
NEW YORK (AP) -- LandAmerica Financial Group Inc. shares rose to an all-time high Wednesday after a Keefe Bruyette & Woods analyst said the title insurance company will improve its margins and may buy back more shares of its stock.
Nathaniel Otis raised his price target for LandAmerica stock to $84 per share from $80, and maintained his "Outperform" rating. He said LandAmerica, after paying off $100 million in debt and $80 million in interest and dividends over the next two years, will have $400 million in available capital, enough to repurchase up to a third of its outstanding shares, and expects it will use most of the money for that purpose.
Margins will improve as a result of Project Fusion, an effort to standardize the company's operating platforms, Otis said. It is also working to become more cost-efficient by unifying its subsidiaries.
"Given our positive view of the company's operations and strategic direction as well as almost 14 percent total return upside in shares of LandAmerica over the next year, we would be buyers of the stock at the present time," he said.
Otis raised his estimates and now predicts $7.53 in earnings per share for 2007, and $8.14 per share in 2008, up from $7.13 and $7.30, respectively.
LandAmerica shares gained $3.56, or 4.8 percent, to $78.20 in afternoon trading on the New York Stock Exchange. The stock peaked at $78.82. Its previous high was $76.26, set on March 21.
Copyright 2007 Associated Press
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