UBS Upgrades American Axle (AXL) to Buy 'on positive risk/reward'

UBS analyst Joseph Spak upgraded American Axle (NYSE: AXL) from Neutral to Buy with a price target of $7.00 (from $4.50).

The analyst comments "Our thesis is based on: 1) A longer tail for core AXL programs such as GM’s full-size truck/SUV platform (T1XX) amid a relaxed US emissions regulatory environment. 2) GM adding US capacity is a net positive for AXL that could boost outer year earnings power and is not yet in consensus numbers. 3) At current levels, the proposed transaction with Dowlais (a UK listed automotive supplier) could potentially create long-term value, in our view. Further, we note that AXL has meaningfully lagged vs. the supplier peers over the past quarter, which we believe is in part due to overhang from the proposed Dowlais transaction. Closure could be a catalyst; AXL votes on July 15 and DWL votes on July 22."

For an analyst ratings summary and ratings history on American Axle click here. For more ratings news on American Axle click here.

Shares of American Axle closed at $4.41 yesterday.

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