UBS Raises Price Target on Navistar (NAV) to $20 Following VW Investment
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UBS reiterated a Neutral rating on Navistar International (NYSE: NAV), and raised the price target to $20.00 (from $11.00), following recent VW investment. UBS believes that the investment provides a vote of confidence to NAV's shareholders and customers and raised the price target to reflect the reduced risk.
Analyst Steven Fisher commented, "While NAV continues to face challenges from a weak truck market, and is still restructuring, we think the recent VW investment has reduced credit risk. Near-term, we expect a weak truck market in 2017 to offset some of the improvements made to date, resulting in flat YoY EBITDA. Industry OEMs have discussed pricing pressure, and we expect increased competition while the market retrenches. In FY18 we think NAV may see some benefit from synergies with VW, and we think the VW and Cummins partnerships should help improve market share. We think NAV could see FY18 EBITDA growth, bolstered by our expectation for 2018 end market growth in Class 8 trucks."
Shares of Navistar International closed at $19.30 yesterday.
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