S&P Equity Research Picks PCP Focus Stock of the Week

NEW YORK, Nov. 8, 2010 /PRNewswire/ -- Precision Castparts (PCP: $145) has been picked by Standard & Poor's Equity Research as its Focus Stock of the Week. PCP carries S&P's highest investment recommendation of 5-STARS, or Strong Buy.  Precision Castparts is widely regarded as the world leader in investment casting for aerospace jet engines and industrial gas turbine applications.  

"Our Strong Buy on PCP is based on improved demand and new product introductions in commercial airspace, overall economic improvement, and strong productivity enhancements put in place by PCP allowing the company to achieve higher earnings on a given level of sales than in the previous economic up-cycle," said Richard Tortoriello, Aerospace & Defense Equity Analyst at Standard & Poor's Equity Research.  "Over the past few months, PCP clients Boeing (BA 71, Buy) and Airbus have announced plans to significantly increase aircraft production rates.  Also, with aircraft utilization rising, we see aftermarkets parts demand for jet engines increasing significantly, as airlines schedule more maintenance and increased utilization spurs demand for more parts."  

Tortoriello expects general industrial sales, about 21% of PCP's total sales, to continue to grow with the overall economy.  Although he sees sales of parts for industrial gas turbines used in electrical power generation, which are about 11% of total sales, growing slowly in fiscal year 2012 (March), due to excess electrical generating capacity in the U.S. and Europe, he also views this market as an area for potential improvement in fiscal year 2013 and beyond.

To view a video of Mr. Tortoriello discussing Precision Castparts, paste the following link into your browser.  

http://link.delvenetworks.com/media/?mediaId=b63ca779129147a0951faf3800373f42&width=480&height=411&playerForm=DelvePlayer

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S&P Global STARS Distribution

In North America

As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services North America recommended 39.2% of issuers with buy recommendations, 52.5% with hold recommendations and 8.3% with sell recommendations.

In Europe

As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services Europe recommended 36.6% of issuers with buy recommendations, 43.2% with hold recommendations and 20.2% with sell recommendations.

In Asia

As of September 30, 2010 research analysts at Standard & Poor's Equity Research Services Asia recommended 46.8% of issuers with buy recommendations, 44.4% with hold recommendations and 8.8% with sell recommendations.

Globally

As of September 30, 2010, research analysts at Standard & Poor's Equity Research Services globally recommended 39.5% of issuers with buy recommendations, 50.2% with hold recommendations and 10.3% with sell recommendations.

5-STARS (Strong Buy): Total return is expected to outperform the total return of a relevant benchmark, by a wide margin over the coming 12 months, with shares rising in price on an absolute basis.

4-STARS (Buy): Total return is expected to outperform the total return of a relevant benchmark over the coming 12 months, with shares rising in price on an absolute basis.

3-STARS (Hold): Total return is expected to closely approximate the total return of a relevant benchmark over the coming 12 months, with shares generally rising in price on an absolute basis.

2-STARS (Sell): Total return is expected to underperform the total return of a relevant benchmark over the coming 12 months, and the share price is not anticipated to show a gain.

1-STARS (Strong Sell): Total return is expected to underperform the total return of a relevant benchmark by a wide margin over the coming 12 months, with shares falling in price on an absolute basis.

Relevant benchmarks: In North America, the relevant benchmark is the S&P 500 Index, in Europe and in Asia, the relevant benchmarks are generally the S&P Europe 350 Index and the S&P Asia 50 Index.

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