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Are Analysts Turning Bearish on Dover Corporation?

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Analysts’ recommendations for Dover Corporation

Given the trend in the number of “buy” calls and the average target price for Dover Corporation’s stock, it could be said that analysts have turned a bit bearish over the course of 1Q15. In the beginning of the quarter in early January, six of the 19 analysts covering Dover’s stock had a “buy” rating. One analyst had a “sell” rating, and the remaining 12 analysts were neutral.

By the end of March, the number of “buy” calls had dipped to three. While the number of “sell” calls remained unchanged at one, the number of “neutral” ratings had jumped to 16 (one additional analyst). The average target price of all analysts covering Dover’s stock fell from $64.47 in early January to $62.33 toward the end of the first quarter.

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Notable target price changes

Analysts at major banks revised their estimates after the business update provided by the Dover in mid-March. Among major investment banks, UBS downgraded the stock from “neutral” to “sell” toward the end of 1Q16. The analyst covering the stock revised the 12-month target price from $62 at the beginning of the year to $49 at the end of 1Q16.

Charles Brady, an analyst at SunTrust Robinson Humphrey, downgraded his recommendation from “buy” to “neutral” and revised the target price from $72 to $67. Barclays, while maintaining its “equal-weight” rating, revised its target from $58 to $56. Barclays now anticipates Dover’s earnings per share to drop to $0.58 from the initial estimate of $0.66.

Investors interested in trading in the industrial space can look into the Guggenheim S&P 500 Equal Weight Industrials ETF (RGI). Those interested in trading in dividend-based ETFs can look into the SPDR S&P Dividend ETF (SDY). Major holdings in SDY include AT&T (T) with a weight of 2.0%, Caterpillar (CAT) with a weight of 1.9%, and Dover Corporation (DOV) with a weight of 1.1%.

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