UPDATE: Deutsche Bank Lowers Target to $40 on Tenneco

Deutsche Bank maintains its Buy rating on Tenneco

on solid performance in the fourth quarter, but lowers its price target to $40 from $42 a share o a lower OE revenue outlook. Deutsche Bank says, "Higher incremental margins drove better than expected Q4 results. Tenneco reported adj'd Q4 EPS of $0.53 vs DBe of $0.50. Stronger-than-expected margins led to the upside, despite lower-than-expected revenue ($1.78bn vs DBe of $1.84bn estimate). Incremental EBIT margin, ex substrate, of 14.1% was the highest since 2Q10 and significantly outperformed our 8.5% estimate. Better SG&A cost control (5.6% of sales vs. our 6.6% est) was the largest driver. Management also confirmed its expectations of margin improvement in 2011, despite a lower OE revenue outlook. " TEN closed at $34.23 a share yesterday.