KeyBanc Upgrades Tenneco Automotive (TEN) to Buy; Financial Risk Appears Manageable
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KeyBanc upgrades Tenneco Automotive (NYSE: TEN) from Hold to Buy. Price target $12.
KeyBanc analyst says, "We are upgrading our rating on TEN to BUY on our beliefs that: 1) while financial risk remains high, based on our liquidity analysis and our belief that lenders will grant covenant relief if needed, we believe the financial risk is manageable; 2) the risks associated with a GM/Chrysler bankruptcy appear manageable; 3) earnings and free cash flow will improve sequentially driven by a combination of improving production and restructuring savings, which will serve as a positive catalyst; 4) the longer term investment thesis appears to be intact as demand for the Company's emission lowering products continues to drive solid (i.e., 10%+) underlying organic (i.e., new business) revenue growth; 5) improving retail auto financing and used car trends portend a rise in U.S. new car sales, which will serve as a positive catalyst; 6) valuation remains attractive (i.e., Enterprise Value/Sales). We are increasing our earnings estimate to a loss of $1.37 from a loss of $1.84 for 2009 (First Call mean $2.01 loss) and maintaining our $0.43 estimate for 2010 (First Call mean $0.12 loss)."
Tenneco Inc. (Tenneco) designs, manufactures and sells automotive emission control and ride control systems and products.
To see more analyst ratings on TEN Click Here.
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