UPDATE: KeyBanc Downgrades Meritor to Hold, Suspends Target

In a research note, KeyBanc Capital Markets downgraded Meritor, Inc. MTOR to Hold from Buy and suspended its price target to NA from $16 per share following the company's earnings release and conference call. KeyBanc said it took these actions “based on our belief that: 1) the risk has materially increased given the potential for weaker end markets in Europe, South America and China combined with investor perception that financial risk is high relative to many of its peers; 2) the potential reward is lower given materially lower revenue expectations driven in large part by management's disappointing 2012revenue guidance, which was approximately $500 million or roughly 10% below our previous estimate; 3) there are few near-term catalysts as sales and EBITDA are expected to decline into 1Q12 driven by lower South America, Chinese and Military sales.” MTOR closed at $5.67 per share on Thursday.