FBR Capital Upgrades Gentherm Incorporated (THRM) to Outperform; Positive Risk/Reward
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FBR Capital upgraded Gentherm Incorporated (NASDAQ: THRM) from Market Perform to Outperform and maintained a price target of $42.00, saying risk/reward has shifted positively.
Analyst Christopher Van Horn commented, "Gentherm shares have reached attractive levels, and the potential upside in valuation from several key opportunities now appears to outweigh the downside from near-term concerns. We have been consistently neutral on this stock, but an improving risk/reward balance leads us to raise our rating to Outperform. We believe investors should focus on two key points. In the first place, we believe that recent selling pressure has priced in a bear-case scenario for core volumes that is unlikely to come about in the next 12 months—much less over the long term. In the second, we think that the current valuation fails to recognize a central underlying opportunity in industry adoption of key Gentherm products. All things considered, given the prevailing negative sentiment this year (that has carried shares down 36% year to date vs. the S&P 500 up 5%), we think that these fundamentals are not being appropriately priced. While we are tweaking our estimates to normalize our assessment of Gentherm's cost structure, we are maintaining our $42 price target on shares. We raise our rating to Outperform, from Market Perform."
Shares of Gentherm Incorporated closed at $30.40 yesterday.
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