UPDATE: Craig-Hallum Upgrades Gentherm Incorporated (THRM) to Buy
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Craig-Hallum analyst Ryan Sigdahl upgraded Gentherm Incorporated (NASDAQ: THRM) from Hold to Buy, PT $110.00.
The analyst comments "THRM is executing well in a challenging production environment, including significant industry outperformance and continued execution on its ‘fit-for- growth’ cost optimization (OpEx down 10% vs Q2-19). Given the strong award bookings over the past few years, combined with much needed ramp in vehicle production, we think THRM has good visibility to double-digit revenue growth. Moreover, THRM announced its first ClimateSense commercial award with a global OEM. This is the most important new product for THRM and helps solve a major problem for EVs (50% less power consumption, 50+ mile range extension). This product is proprietary, has meaningfully higher content (2-4x), and we think has the potential to be a $1B+ annual product in the future. As for the stock, we like the risk/reward given $4/share of net cash and growing ($100M/year FCF), modest valuation (11x EV/EBITDA vs comps at 14x), strong demand and production tailwinds, improving fundamentals and potentially a re-rating on greater visibility to it being a major EV beneficiary."
Shares of Gentherm Incorporated closed at $81.48 yesterday.
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