MetroGlass rated 'buy' on upbeat outlook by Craigs

Metro Performance Glass, which listed on the NZX last year, has been rated a 'buy' by Craigs Investment Partners, which coverage last month.

Auckland-based MetroGlass, which has more than half of New Zealand's glass processing market, is set to benefit from a buoyant construction market where it faces little rivalry, research analysts Dennis Lee and Grant Swanepoel said in a note. The Craigs rating is consistent with the average of five analysts polled by Reuters.

"MetroGlass is a pure cyclical play on the New Zealand building sector," Lee and Swanepoel said. The "New Zealand construction sector is currently undergoing a strong cyclical upturn underpinned by the Canterbury reconstruction and a relatively healthy economic outlook. We believe it is well positioned to deliver strong earnings per share growth of 22-23 percent compound annual growth over the next three years capitalizing on the sector recovery."

In addition, MetroGlass is set to benefit from increased demand for retrofitting of windows, and from a consolidation of its Auckland business from five separate sites to one purpose-built facility, the analysts said.

Craigs set a 12-month price target for the stock of $2.15, consistent with the current median of analysts polled by Reuters. The company's shares recently traded at $1.94, up from its $1.70 initial public offer price.