Wells Fargo Upgrades Gentex (GNTX) to Outperform; Well Positioned to Grow Long-Term

October 26, 2009 8:13 AM EDT

Wells Fargo upgrades Gentex (Nasdaq: GNTX) to Outperform. Valuation range of $22-$23 (from $15-$16.50).

Wells analyst says, "Our valuation range applies a multiple of 22-23x to our 2011 EPS estimate of $1.00. We believe our ‘11 EPS estimate could be conservative as we do not assume significant yr./yr. increases in ASP and gross margins for 2011. We expect NA production to rebound significantly in 2010 and 2011. Increased penetration of SmartBeam and rear camera display (RCD) mirrors should benefit pricing and mix over the next few years. We have raised our 2009 EPS estimate to $0.44 (from $0.34), our 2010 EPS estimate to $0.75 ( from $0.54, consensus is $0.64) and our 2011 EPS estimate to $1.00 (from $0.74, consensus is $0.72). For 2011, we estimate every $0.50 increase in ASP coupled with a 50bp increase in gross margin adds $0.03 to our $1.00 EPS estimate. We estimate a ~$48 ASP paired with a 37.8% gross margin would generate $1.15 in EPS. We estimate 50% annual growth in SmartBeam and RCD shipments in 2010 and 2011 would add $0.02 to our '10 EPS estimate and $0.09 to our '11 EPS estimate...We believe valuation is attractive given earnings growth prospects."

To see more analyst ratings on GNTX Click Here.

Gentex Corporation designs, develops, manufactures, and markets electro-optic products, including automatic-dimming rearview mirrors for the automotive industry, and fire protection products for the commercial building industry worldwide.

Related Categories

Upgrades

Stocks Mentioned

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?