Stifel Boosts PT on Navistar (NAV) to $14 Amid Volkswagen Deal; Maintains 'Sell' Rating
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Stifel lifts its price target on Sell-rated Navistar International (NYSE: NAV) from $10 to $14 following news of a new collaboration with Volkswagen.
Analyst Michael Baudendistel commented today:
It is clear to us that the news on Monday and Tuesday is a long-term positive development for Navistar and a negative for Cummins. We are increasing our target price on NAV shares from $10 (or 8.0x our 2018 EBITDA estimate of $650 million) to $14 (or 8.5x our 2018 EBITDA estimate of $650 million) to reflect the lower liquidity and solvency risk following the inflow of cash and alignment with a better-capitalized company.
In addition, we believe the next revision to our forward estimates is likely to be up on the aforementioned purchasing and R&D synergies; we will keep our forward estimates unchanged for now since the company reports earnings in two days and we expect additional detail to be provided at that time.
Our Sell rating on Navistar reflects our view that orders for heavy and medium duty equipment are likely to disappoint during the fall order season in light of the pricing pressure in truckload rates, among other factors.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst PT Change
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