Roth Sees Positive Read-Through on Power Solutions (PSIX) Following Results from Navistar (NAV); Boosts PT to $23

Roth Capital sees a positive read-through for Power Solutions International (Nasdaq: PSIX) following quarterly results from Navistar (NYSE: NAV). The firm boosted its price target on Power Solutions from $16 to $23 and affirms a Buy rating.

Analyst Craig Irwin commented today: Primary take away is demand is strong, particularly in school buses and construction. NAV also identified the 8% gasoline-engine portion of the medium-duty market as a long-term opportunity, where it does not currently have product, and we believe PSI is well positioned to supply NAV in this market.

Irwin continued, Navistar indicated the school bus market remains strong, and we expect a robust 2H16 mix of LPG platform sales. Navistar-IC competitor Blue Bird spent the time and money pioneering the LPG school bus market, where LPG accounts for over 25% of the current mix. We see similar market penetration as available to NAV. PSI has sent LPG school bus engines to Navistar-IC and to ThomasBuilt (PI), where these two OEMs comprise ~70% of the $700m, 35,000 unit school bus engine market. Industry participants see good potential for LPG penetration rates well above 50% in the school bus market.

Irwin said overall estimates on Power Solutions remain unchanged at this time.

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

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