Barclays on U.S. Autos & Auto Parts: Names to Buy, Names to Sell

April 4, 2012 1:49 PM EDT
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Price: $37.34 -0.45%

Rating Summary:
    14 Buy, 16 Hold, 2 Sell

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Barclays on U.S. Autos & Auto Parts: U.S. Monthly Auto Tune-Up

Analyst, Brian A. Johnson, said, "We remain optimistic on US auto sales and currently forecast 2012 US light vehicle sales of 14.4mn; notably, March US SAAR came in at 14.4mn (near our expectation of 14.5mn)...GM (NYSE: GM) is our top pick within the OEMs (and within our broader coverage universe), with potential upside of 45% to our PT of $37, as we appreciate GM's 2013 product cadence, strong cash position, emerging markets exposure, and improvements from management."

Johnson said that while Ford (NYSE: F) may have the short-term advantage over GM (citing issues like International macro environment and rising gas prices), he feels that GM is closing the gap, and its more narrow that most investors think.

Top suppliers citing were Dana (NYSE: DAN) and Tenneco (NYSE: TEN). BorgWarner (NYSE: BWA) and Delphi (Nasdaq: DLPH) should also benefit from powertrain businesses. Johnson is more cautious on Johnson Controls (NYSE: JCI) and Lear (NYSE: LEA), citing marging contraction. Lastly, he suggests taking profits on American Axle (NYSE: AXL), citing mixed headwinds.

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