Barclays Maintains an 'Overweight' on Meritor (MTOR); Guidance Cut Revives Goldilocks Concerns
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Price: $36.50 --0%
Rating Summary:
5 Buy, 8 Hold, 0 Sell
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Today's Overall Ratings:
Up: 10 | Down: 16 | New: 19
Rating Summary:
5 Buy, 8 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 10 | Down: 16 | New: 19
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Barclays maintains an 'Overweight' on Meritor (NYSE: MTOR), PT lowered from $25 to $20.
Barclays analyst says, "At Mid-America Trucking Show yesterday, Meritor cut its F2Q11 EBITDA guidance, despite raising its revenue estimates due to stronger commercial vehicle production. MTOR blamed a host of temporary and one-time cost increases (lag in steel recovery, dispute over royalties, launch costs) for its lowered expectations, but investors were justifiably disappointed by this latest struggle to convert stronger revenues into higher earnings. It may be too early to tell decisively whether this underperformance reflects slipping operational execution at MTOR or genuine industry cost inflation, but either way, we think the company's path to its 10% margin goal has just become longer."
"We now expect EBITDA of $328mn in 2011 and $435mn in 2012, down from $350mn and $470mn." (Lowers FY11 EPS estimate from $0.73 to $0.54 and FY12 from $2.00 to $1.90)
For more ratings news on Meritor click here and for the rating history of Meritor click here.
Shares of Meritor closed at $16.97 yesterday.
Barclays analyst says, "At Mid-America Trucking Show yesterday, Meritor cut its F2Q11 EBITDA guidance, despite raising its revenue estimates due to stronger commercial vehicle production. MTOR blamed a host of temporary and one-time cost increases (lag in steel recovery, dispute over royalties, launch costs) for its lowered expectations, but investors were justifiably disappointed by this latest struggle to convert stronger revenues into higher earnings. It may be too early to tell decisively whether this underperformance reflects slipping operational execution at MTOR or genuine industry cost inflation, but either way, we think the company's path to its 10% margin goal has just become longer."
"We now expect EBITDA of $328mn in 2011 and $435mn in 2012, down from $350mn and $470mn." (Lowers FY11 EPS estimate from $0.73 to $0.54 and FY12 from $2.00 to $1.90)
For more ratings news on Meritor click here and for the rating history of Meritor click here.
Shares of Meritor closed at $16.97 yesterday.
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