Navistar International (NAV) PT Raised to $45 at Jefferies on Improving Volume and Profitability

Jefferies analyst Sephen Volkmann raised the price target on Navistar International (NYSE: NAV) to $45.00 (from $35.00) after 3Q operating results came in ahead of expectations despite lower production volumes as truck rental/leasing companies, an outsized customer for NAV, remain among the hardest hit through the pandemic. The company ended the quarter with $1.6bn in manufacturing cash and anticipates a similar level in 4Q even as some costs are reinstated.

The analyst maintained a Buy rating, stating "Based on current industry trends the company anticipates sequential improvement in both Truck volumes and profitability in the F4Q. As some costs return into F2021 NAV anticipates taking structural actions to maintain SG&A between 7-9% of revenues. While management did not provide any guidance on volumes, it remains confident in the Navistar 4.0 strategy and are willing to invest in it to produce stronger margins".

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