Deutsche Bank Upgrades TRW Automotive (TRW) to Buy; Raises PT and Estimates on Sustainable Outlook

November 5, 2009 10:26 AM EST

Deutsche Bank upgrades TRW Automotive (NYSE: TRW) from Hold to Buy. Price target increased by $2 to $23.

Deutsche analyst says, "Q3 results provided further evidence of TRW’s structural cost reduction, which we believe implies higher margins at lower revenue in the long run, and higher incremental margins in the short run. We also see evidence that TRW should be able to sustain better than average top line growth. TRW continues to make progress restructuring its balance sheet, and we see further opportunity. In addition, we are increasingly convinced that further production cuts in Europe will be manageable."

"We are raising our 4Q09, 2010, and 2011 EPS estimates to $0.76, $2.00 and $2.60 from $0.40, $1.58 and $2.33. We project Q4 EBITDA of $290MM, or annualized EBITDA of $1.16bn. Our estimates are based on 4Q09 annualized production levels of 10.9MM in North America and 14.2MM in Europe. In this context, we believe that our 2010 EBITDA estimate of $1.1bn, based on 11.4MM in North America and 14.1MM in Europe, as well as our 2011 EBITDA estimate of $1.2bn, based on 12.8MM units in North America and 14.6MM units in Europe, could both prove conservative."

To see more analyst ratings on TRW Click Here.

TRW Automotive Holdings Corp., together with its subsidiaries, designs, manufactures, and sells automotive systems, modules, and components for automotive original equipment manufacturers and related after-markets.

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