Lake Street Capital Markets Starts Fuel Systems Solutions (FSYS) at Buy

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Lake Street Capital Markets initiated coverage on Fuel Systems Solutions (NASDAQ: FSYS) with a Buy rating and $18 price target.

Analyst Robert D. Brown comments, "Although we would not be surprised to see an earnings shortfall for Q4-12 (to be reported March 8) and a lowering of forward estimates (our 2013 estimates are set below consensus), we believe it is time to revisit Fuel Systems. Earnings likely bottomed in Q4 and are set to re-accelerate, the stock is inexpensive (4.8x EV/EBITDA), and the company is in a strong position to see growth from the secular shift to natural gas vehicles.

As revenue growth returns, we estimate operating margins can recover to at least 5% in 2014 from under 2% in 2012. Further, we think the multiple will move from a discount to at least in-line with its comp group (which trades at roughly 7x EV/EBITDA) with more consistent execution and clarity on future growth."

For an analyst ratings summary and ratings history on Fuel Systems Solutions click here. For more ratings news on Fuel Systems Solutions click here.

Shares of Fuel Systems Solutions closed at $13.70 yesterday, with a 52 week range of $13.38-$28.54.

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