Manitowoc has yet to officially respond to activist investor Carl Icahn’s newly acquired stake and announcement of activist intentions. However, analysts have been quick to comment. Neither Morgan Stanley analysts nor Susquehanna analysts see much upside potential to the company’s shares. Both firms use a sum of the parts analysis for Manitowoc.

After surging on Monday because Icahn revealed a stake in the company, shares quieted down this morning, climbing only about 1% in premarket trading and then pulling back in early regular-hours trading.

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In their report dated Dec. 29, 2014, Morgan Stanley analysts Nicole DeBlase, Mili Pothiwala and Thomas Robb point out that Icahn isn’t the first to attempt to split Manitowoc’s two businesses. Icahn revealed a 7.8% stake this week, while Relational Investors announced an 8.5% stake along with the intent to split the business in June. In October, Relational Investors said it would vacate all of its positions after its founder’s medical leave of absence.

While Relational Investors was attempting to split Manitowoc, management pushed back, publishing slides in September explaining why its Crane and Foodservice businesses share some synergies. Their arguments included diversifying the company’s portfolio and improving procurement, scale, and back-office functions.

In their report also dated Dec. 29, 2014, Susquehanna analysts Ted Grace and Tim Robinson said they expect management to come back with a statement saying that will act in the best interests of the company and its shareholders to drive value. They do think the company’s board will again consider splitting the business, but they think it’s unlikely management will actually do it.

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They note that over the last several quarters, Manitowoc has seen weak Cranes orders. Additionally, the state of the segment’s cycle because of energy prices or competitive positioning remains uncertain.

The Morgan Stanley team sees portfolio diversification as being the only argument that has any merit. In particular, they note that the Foodservice segment can offset the Crane segment’s hyper-cyclicality. Morgan Stanley’s base case suggests Manitowoc is worth $20 a share, while their bull case suggests a sum of the parts valuation of $30 per share.

The analysts point out that if the Foodservice business stood alone, it would probably have more debt because of the leverage connected with is acquisition of Enodis in 2008. They continue to rate Manitowoc as Overweight with a $25 per share price target.

The Susquehanna team also sees little benefit for Manitowoc if the company did split. They don’t think it will unlock any “meaningful” value for shareholders. In fact, they see a sum of the parts valuation as being too optimistic, as Wall Street’s estimates for the company’s 2015 results are 10% better than their estimates. That comes despite “meaningfully increased risks” to Manitowoc’s energy exposure in the last few months. They remain Neutral-rated on Manitowoc and see a price target of between $23 and $26 per share.

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