UPDATE: UBS Starts Adient (ADNT) at Buy
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(Updated - October 31, 2016 10:42 AM EDT)
UBS initiated coverage on Adient (NYSE: ADNT) with a Buy rating and a price target of $65.
Analyst Colin Langan said, "Trading at ~5x our 2017E EPS, ADNT is the cheapest auto parts supplier, yet we see a compelling margin expansion opportunity and believe the market is not valuing its large China JVs correctly. We see no structural reason why ADNT cannot close the margin gap with peers. If it did, our EPS 2017E would increase by ~50%. There are also opportunities to unlock the value in its China JVs. Our confidence in the story is boosted by new management. CFO Stafeil has a track record for turnarounds, and recently addressed margin & China JV issues in his prior role at VC, which was a great restructuring story. With investors cautious that the autos cycle may have peaked, ADNT's margin self-help and new management will increases confidence that they can drive shareholder value even in a flat global auto market."
Shares of Adient closed at $45.98 yesterday.
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