Eagle Materials upgraded at Raymond James, seeing activist spark

• Eagle Materials (EXP +1.3%) is flying higher after Raymond James upgrades shares to Outperform from Market Perform with a $95 price target, as the firm thinks activist Sachem Head Capital will be successful in achieving favorable changes in the company's portfolio.
• Sachem recently disclosed a nearly 9% stake in EXP and said it is pushing for a sale of the frac sand business and possibly other business units.
• The most likely scenarios, Ray Jay says, are selling just the proppants business and then buying shares or selling both proppants and the cement and concrete business followed by buying back shares.
• Also, Stifel analysts note that Sachem Head Capital, in disclosing its stake, said it believes EXP is worth at least $130/share in a sale; in its own sum-of-the-parts analysis, Stifel thinks EXP is worth $95-$100/share.
• Stifel maintains a Buy rating and $94 price target on EXP shares.