Barrington Sees Navistar (NAV) Worth $50-$75/Share in Takeover, Maintains Outperform

June 12, 2012 1:01 PM EDT Send to a Friend
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Price: $36.25 +2.37%

Rating Summary:
    5 Buy, 15 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 18 | New: 41
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Barrington Research's Walter Liptak maintained an Outperform rating on Navistar (NYSE: NAV) shares Tuesday following Q2 results from the company on June 7th and news this morning a federal court threw out a special EPA rule. Shares are down nearly 12 percent at last check.

While Liptak admitted "the EPA overhang will continue to impact 2012 profitability and market share," the analyst's bullish sentiment can be attributed to speculative upside "due to the combination of activist shareholders involved in the shares. Potential synergistic truck buyers like VW or Fiat might go for a takeover to gain a larger share in the North American truck market."

The Barrington analyst is modeling for Navistar shares to be worth $50-$75 per share in the event of a strategic acquisition. Liptak sees the company's takeover multiple at about 0.55x-0.60x sales on 2015 sales of $20 billion.

With Navistar shares last trading around $25.50, Liptak's takeover range represents a premium of 96-194 percent.

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