KeyBanc Upgrades TRW Automotive (TRW) to Buy; Confident That Global Light Vehicle Production Trends Up

November 5, 2009 8:47 AM EST

KeyBanc upgrades TRW Automotive Holdings (NYSE: TRW) from Hold to Buy. Price target $29.

KeyBanc analyst says, "Following TRW's earnings release and subsequent conference call, we are upgrading our rating to BUY based upon our belief that: 1) as global light vehicle production returns to normalized levels, TRW's operating margins are likely to be higher than their historical range; 2) TRW will likely generate solid free cash flow going forward, which we believe will be used to reduce debt, interest expense and improve the Company's balance sheet; and 3) there is good possibility the Company's U.S. operations could become profitable once production returns to normalized levels and, because of TRW's substantial deferred tax assets, the Company will not be a tax payer in the United States for many years, which will likely drive free cash flow higher than historic levels. Due primarily to better than expected sales and margins, we are raising our earnings estimates to $0.45 from a loss of $0.90 (First Call consensus a loss of $0.51) for 2009 and to $1.76 from $0.58 (First Call consensus $1.18) for 2010."

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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