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Hubbell, Inc. (HUB.B)

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Hubbell, Inc.'s (HUB.B) first quarter results beat the Zacks Consensus Estimate. We were particularly encouraged by the strong growth in the industrial market, improving demand at utilities and pockets of recovery in the non-residential construction market.

While the stronger revenue growth, coupled with acquisitions and management's margin expansion strategies are currently being offset by commodity cost increases, the situation will improve as price hikes go into effect. Additionally, Hubbell's results bear a strong correlation to GDP growth, which remained positive in the first quarter of 2011.

We therefore have an Outperform recommendation on Hubbell shares. This is supported by the target price of $75 (15.8X our 2012 earnings estimate), which is a discount to the peer group.

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