On Thursday evening, activist fund Relational Investors announced that it took an 8.5 percent stake in The Manitowoc Company (NYSE: MTW).
Shares of the company have rallied as much as nine percent in Friday's trading.
Additionally, analysts at Morgan Stanley and Jefferies have released notes detailing their views on how this will affect the stock in response to this development.
Morgan Stanley - Overweight, $38 PT
According to Morgan Stanley, Relational Investors is urging Manitowoc to split into Crane and Food Service segments, which, the Morgan Stanley analysts pointed out, is not the first time Relational Investors is consistent with its past ventures in the industrial space.
The analysts wrote, "While we remain Overweight on MTW, we have long based this view on cyclical upside potential rather than a Sum of the Parts argument."
Jefferies - Hold, $33 PT
The analysts at Jefferies began, "While there is no change in our fundamental thesis that cranes are a late cycle opportunity we believe that the entry of an activist places a floor on the shares."
Based on this sentiment, the firm has upgraded Manitowoc from Underweight to Hold.
Speaking on a possible split of the company's business, Jefferies analysts commented, "we highlight that management has historically been resistant to a split of the two businesses, we would expect this process to be long and drawn out."
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