Wachovia Upgrades Navistar International (NAV) to Outperform

June 26, 2009 8:08 AM EDT

Wachovia upgrades Navistar International (NYSE: NAV) from Market Perform to Outperform. Valuation range $60-63.

Wachovia analyst says, "Our upgrade is based on expected significant earnings reacceleration in FY2011 after a beneath-consensus FY2010 absent any benefit from potential military contracts into which we have very limited visibility. Establishing EPS estimates, with FY2009E EPS of $3.25 (versus consensus' $2.97), 2010E of $2.15 (versus consensus' $5.11) and 2011E of $5.60. We are not including benefit from military contracts, and NAV could potentially be in a position to achieve consensus if it wins around 50% of the M-ATV contract expected to be announced June 26, 2009. Absent this, consensus appears to be too high."

"Given the significant earnings potential with upside and downside risks, we are looking through potential short-term volatility due to the M-ATV award announcement, a low-quality balance sheet, and risks associated with a portion of the company’s post-2010 engine strategy."

To see more analyst ratings on NAV Click Here.

Navistar International Corporation (NIC) is a holding company that operates through its principal operating subsidiaries, Navistar, Inc. and Navistar Financial Corporation (NFC).

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