Barclays on U.S. Autos & Auto Parts: Raising Price Targets on Increases to North American production Estimates
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Price: $124.95 +1.88%
Rating Summary:
13 Buy, 16 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
13 Buy, 16 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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Barclays on U.S. Autos & Auto Parts: Differentiation emerges amongst parts suppliers
Analyst, Brian A. Johnson, said, "Following the recent increase in our estimate for 2012 US SAAR to 14.4mn from 13.8mn, we have raised our future US SAAR estimates, as well as our estimates for NA production by 800k to 14.2mn, reflecting our increased optimism around the US and North American auto industry. As a result of our increased production estimates, we have raised our estimates for revenue and EBITDA for most of the suppliers, yielding PT increases for Lear (NYSE: LEA) (to $54 from $52), Delphi Automotive (Nasdaq: DLPH) (to $39 from $38), and Tenneco (NYSE: TEN) (to $52 from $51). Our PT on BorgWarner (NYSE: BWA) has also changed (moved to $104 from $95), though this stems from changes to our valuation methodology in addition to our aforementioned modifications to our production estimates."
"Valuation remains cheap, but we do not advocate buying simply due to valuation: Despite cheap valuations in the space despite significant YTD price appreciation, we believe that investors should not buy the stocks simply because they are cheap relative to historical levels, and instead should consider a company's equity valuation in conjunction with its trajectory for growth and margin sustainability and expansion."
Analyst, Brian A. Johnson, said, "Following the recent increase in our estimate for 2012 US SAAR to 14.4mn from 13.8mn, we have raised our future US SAAR estimates, as well as our estimates for NA production by 800k to 14.2mn, reflecting our increased optimism around the US and North American auto industry. As a result of our increased production estimates, we have raised our estimates for revenue and EBITDA for most of the suppliers, yielding PT increases for Lear (NYSE: LEA) (to $54 from $52), Delphi Automotive (Nasdaq: DLPH) (to $39 from $38), and Tenneco (NYSE: TEN) (to $52 from $51). Our PT on BorgWarner (NYSE: BWA) has also changed (moved to $104 from $95), though this stems from changes to our valuation methodology in addition to our aforementioned modifications to our production estimates."
"Valuation remains cheap, but we do not advocate buying simply due to valuation: Despite cheap valuations in the space despite significant YTD price appreciation, we believe that investors should not buy the stocks simply because they are cheap relative to historical levels, and instead should consider a company's equity valuation in conjunction with its trajectory for growth and margin sustainability and expansion."
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