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UBS on U.S. Auto Parts/Suppliers: Cautious on Q2; Lowering FY12 Estimates

July 16, 2012 11:31 AM EDT Send to a Friend
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Price: $22.78 --0%

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    8 Buy, 6 Hold, 0 Sell

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UBS on U.S. Auto Parts/Suppliers: Cautious on Q2; Lowering FY12 Estimates

Analyst, Colin Langan, said, "Going into Q2, we are bullish on Dana (NYSE: DAN) (+$0.03); below consensus for BorgWarner (NYSE: BWA) (-$0.03), Lear (NYSE: LEA) (-$0.09) and VC (-$0.28); and in-line for MTOR (-$0.01) and JCI (+$0.01). While the weakness in Q2 Europe production seems already priced in the stocks, we see BWA’s full year guidance most at risk. LEA’s full year guidance seems achievable; however, we expect better entry points post Q2. Overall, we expect the suppliers provide a more cautious outlook."

"We lowered our 2012E EPS for VC (-$0.30), LEA (-$0.20), DAN (-$0.10), BWA (-$0.10), Johnson Controls (NYSE: JCI) (-$0.03), and Meritor (Nasdaq: MTOR) (-$0.03) to reflect weaker European production (-7% vs. -4% earlier)."

Langan reiterates a Buy rating on DAN, LEA & VC. Neutral rating for BWA, JCI & MTOR.




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