(GTI) GrafTech International Ltd. – Bullish 166% Growth Projection

October 3rd, 2009

GrafTech International Ltd. (GTI) posted much better than expected 2nd quarter earnings and has a bullish 166% next-year growth projection.

Company Description

GrafTech International develops and manufactures graphite and carbon material science based solutions. The company was founded in 1886 and has a marker cap of $1.69 billion.

Shares of GTI have more than tripled in the last 6 months in response to an improving economy and the company’s strong second-quarter results, reported on July 30.

Second-Quarter Results

Net sales were up 18% from last year to $158 million. Earnings were much better than expected, coming in at 51 cents per share, 47 cents ahead of the Zacks Consensus Estimate. The company has beat in the last four quarters by an average of 18%, or 332%.

Graftech also noted that it paid down a large portion of its debt, dropping $115 million to $48 million outstanding. This enabled GrafTech to reduce its interest expense to $1 million from $6 million last year.

Estimates Advance

Since the solid quarter, estimates have moved higher, with the current year adding 3 cents to 41 cents per share. The next-year estimate is pegged at $1.11, a bullish 168% growth projection.

Valuation

From a valuation perspective, it’s clear that the market is looking to the next-year earnings projection, which would place this stocks P/E multiple at 12.5X.

The Chart

Shares of GTI are up big over the last 6 months, more than tripling in value after bottoming out below $5 in early March. More recently, with a new 52-week high in tow, some short-term resistance has developed between $15 and $16, take a look below.

Zacks Investment Research
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More on this topic (What's this?)
Money FlowMo (Steel Specialty Alloys) (Centrifugal Deforest, 1/5/10)
GrafTech International . Earnings Estimate $GTI (Robert Weinstein Trading Blog, 10/25/11)
GrafTech Splashes $14 Million on Fiber Materials (Benzinga, 11/2/11)
GrafTech International: Looking Good, But Not Grea (Penny Stock DD, 12/10/10)
Read more on GrafTech International at Wikinvest

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