Piper Jaffray & Co. Downgrades Wonder Auto Technology (WATG) to Neutral
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Piper Jaffray & Co. downgrades Wonder Auto Technology (Nasdaq: WATG) from Buy to Neutral. Price target lowered from $8 to $5.
Piper analyst says, "Downgrading to Neutral on heightened end market uncertainty. We believe the combination of global auto market turmoil, weakened economic activity in China, and falling commodity prices is resulting in increased market uncertainty for Wonder Auto. While we continue to believe that small-engine passenger cars will outperform larger engine sizes in China, broader market uncertainties are likely to lead to choppy, inconsistent order activity from OEMs over the next 6-12 months. Falling commodity prices in this weakened order backdrop are resulting in increased price competition in Wonder Auto's key markets, which is likely to pressure margins in the coming quarters. As a result of these factors, we are lowering our investment rating from Buy to Neutral. We believe WATG's discounted valuation provides support to the shares at current levels, though lacking a positive catalyst in these uncertain market conditions we believe a more cautious stance is appropriate."
Wonder Auto Technology, Inc. (WATG) is a holding company, whose business operations are conducted, through its operating subsidiaries, Jinzhou Halla Electrical Equipment Co., Ltd., Jinzhou Dongwoo Precision Co., Ltd. and Jinzhou Wanyou Mechanical Parts Co., Ltd.
Piper analyst says, "Downgrading to Neutral on heightened end market uncertainty. We believe the combination of global auto market turmoil, weakened economic activity in China, and falling commodity prices is resulting in increased market uncertainty for Wonder Auto. While we continue to believe that small-engine passenger cars will outperform larger engine sizes in China, broader market uncertainties are likely to lead to choppy, inconsistent order activity from OEMs over the next 6-12 months. Falling commodity prices in this weakened order backdrop are resulting in increased price competition in Wonder Auto's key markets, which is likely to pressure margins in the coming quarters. As a result of these factors, we are lowering our investment rating from Buy to Neutral. We believe WATG's discounted valuation provides support to the shares at current levels, though lacking a positive catalyst in these uncertain market conditions we believe a more cautious stance is appropriate."
Wonder Auto Technology, Inc. (WATG) is a holding company, whose business operations are conducted, through its operating subsidiaries, Jinzhou Halla Electrical Equipment Co., Ltd., Jinzhou Dongwoo Precision Co., Ltd. and Jinzhou Wanyou Mechanical Parts Co., Ltd.
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