Baird Becoming More Confident In American Woodmark's Management, Raises Estimates

Baird provided its outlook on American Woodmark Corporation AMWD after the company posted strong Q1 results. The firm reiterated its Outperform rating, lifting the price target to $88 from $78.

Q1 EPS came at $1.32, beating the consensus of $0.92 and Baird's estimate of $0.89. Revenue was $258 million, below consensus of $262 million and the analysts' estimate of $266 million. EBIT was $32 million, above consensus/Baird's estimate of $24 million.

Management lifted full-year margin outlook by mentioning that F2017 EBIT margins will be up year-over-year, compared to prior guidance for flat.

The analysts raised their EPS estimates and price target on the shares based primarily on stronger margin assumptions. They lifted the F2017 EPS estimate to $4.40 from $3.95 and F2018 EPS estimate to $4.75 from $4.55.

"Our estimates move higher primarily reflecting FQ1 beat and we have higher confidence that management can execute against potential headwinds through remainder of F2017," the analysts wrote.