Jefferies Maintains a 'Buy' on TRW Automotive Holdings (TRW); Sector 'Best Idea'

July 9, 2012 2:55 PM EDT Send to a Friend
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Price: $100.95 -0.28%

Rating Summary:
    4 Buy, 7 Hold, 0 Sell

Rating Trend: = Flat

Today's Overall Ratings:
    Up: 29 | Down: 28 | New: 24
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Jefferies maintains a 'Buy' on TRW Automotive Holdings (NYSE: TRW) price target of $56.00 (from $57.00).

Analyst, Peter Nesvold, said, "Given the highly correlated nature of the group (Autos & Auto Parts), we like to screen for names with stories outside of pure leverage to the cycle, and as such would highlight TRW as our best idea. We think there is a reasonable chance the European antitrust investigation could be settled by as early as year-end. This would allow TRW to renegotiate its bank debt and remove the restriction against share repurchases. At current valuations (2.9x EBITDA), the stock has massive leverage to even a modest buyback: for instance, only levering up 1x EBITDA would mean that TRW could buy back one-third of the market cap (although a buyback of that magnitude is not our official target). Moreover, these catalysts over the next 12-18 months help distinguish TRW in markets that aren’t always fundamentally driven and give investors a reason to own the name even with the strongest performance YTD."

For an analyst ratings summary and ratings history on TRW Automotive Holdings click here. For more ratings news on TRW Automotive Holdings click here.

Shares of TRW Automotive Holdings closed at $36.79 yesterday.


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