KeyBanc Upgrades American Axle (AXL) to Buy
Tweet
Share
E-mailGet Alerts AXL Hot Sheet
Price: $9.00 --0%
Rating Summary:
8 Buy, 10 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 9 | Down: 14 | New: 29
Rating Summary:
8 Buy, 10 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 9 | Down: 14 | New: 29
Join SI Premium – FREE
KeyBanc upgraded American Axle (NYSE: AXL) from Hold to Buy with a $15 price target.
The firm cites:
1) a deceleration in 2H11 GMT900 (GM full-size SUVs and pickups and 55-60% of sales) production has likely been priced in at current levels and the combination of some extended summer shutdowns and targeted incentive activity (e.g., Truck Month) could alleviate the inventory overhang;
2) while our earnings estimates and price target are not predicated on increasing GMT900 production, the potential for an upward bias exists if we see some moderate housing market improvement and oil sustained below $100 per barrel; 3) revenue growth and diversification is supported by a new business backlog with the pace and scale of launch activity accelerating in 2012;
4) its new business agreement with GM is now largely reflected in the results, and the margin impact appears very manageable;
5) although free cash is limited in 2011 by the anticipated reversal of accelerated receivable terms from GM, going forward we expect free cash flow to be more meaningful driving balance sheet improvement; and
6) several cash EBITDA improvements (i.e., market competitive UAW agreement or closures of facilities at Detroit and Cheektowaga and the reversal of a 1% parts discount to GM) roughly offset the expiration of deferred revenue on February 25, 2012, which creates non-cash EBITDA.
The firm leaves 2011 EPS unchanged at $1.67, versus the consensus of $1.79, but raises 2012 from $1.95 to $2.10, versus the consensus of $2.22.
For more ratings news on American Axle click here and for the rating history of American Axle click here.
Shares of American Axle closed at $10.95 yesterday.
The firm cites:
1) a deceleration in 2H11 GMT900 (GM full-size SUVs and pickups and 55-60% of sales) production has likely been priced in at current levels and the combination of some extended summer shutdowns and targeted incentive activity (e.g., Truck Month) could alleviate the inventory overhang;
2) while our earnings estimates and price target are not predicated on increasing GMT900 production, the potential for an upward bias exists if we see some moderate housing market improvement and oil sustained below $100 per barrel; 3) revenue growth and diversification is supported by a new business backlog with the pace and scale of launch activity accelerating in 2012;
4) its new business agreement with GM is now largely reflected in the results, and the margin impact appears very manageable;
5) although free cash is limited in 2011 by the anticipated reversal of accelerated receivable terms from GM, going forward we expect free cash flow to be more meaningful driving balance sheet improvement; and
6) several cash EBITDA improvements (i.e., market competitive UAW agreement or closures of facilities at Detroit and Cheektowaga and the reversal of a 1% parts discount to GM) roughly offset the expiration of deferred revenue on February 25, 2012, which creates non-cash EBITDA.
The firm leaves 2011 EPS unchanged at $1.67, versus the consensus of $1.79, but raises 2012 from $1.95 to $2.10, versus the consensus of $2.22.
For more ratings news on American Axle click here and for the rating history of American Axle click here.
Shares of American Axle closed at $10.95 yesterday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Bernstein SocGen Group Upgrades Sona BLW Precision (SONACOMS:IN) to Outperform
- First Reliance Bancshares, Inc. (FSRL) Reports In-Line Q2 EPS
- Bernstein SocGen Group Upgrades Sona BLW Precision (SONACOMS:IN) to Outperform
Create E-mail Alert Related Categories
Hot Upgrades, UpgradesRelated Entities
KeyBanc, EarningsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
