UBS Cuts Price Target on Navistar (NAV) Following 4Q Guidance Release
UBS maintained a Neutral rating on Navistar International (NYSE: NAV), and cut the price target to $18.00 (from $27.00), following the company's 4Q15 guidance. NAV is targeting 4Q adjusted EBITDA of $175-225m, up from $129m in 3Q.
Analyst Steven Fisher commented, "NAV is targeting 4Q adjusted EBITDA of $175-225m, up from $129m in 3Q, and reiterated it remains on track to achieve an 8% adj EBITDA margin in 4Q. Guidance implies 4Q revenue of $2.2-2.8b. While the 4Q margin target represents a significant uptick from 3Q's 5.1%, NAV noted its core North America Truck, Parts & Other business achieved 7.9% EBITDA margins in 3Q, but overall results were weighed down by used truck, global operations and Mexico/export. NAV anticipates 4Q improvement in these challenged businesses, noting line of sight to improved Mexico results (higher backlog and potentially higher 4Q orders) and increased used truck sales (higher volumes, although pricing remains challenged)."
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Shares of Navistar International closed at $16.61 yesterday.