UPDATE: Axiom Capital Reiterates Sell, $25 PT on Polypore International; Pressure From Weak Volt, Leaf Sales
Axiom Capital reiterated its Sell rating and $25 price target on Polypore International (NYSE: PPO) on Thursday, as it believes weak electric car sales and production will pressure the company's outlook.
Axiom Capital notes, "GM produced 1,141 Chevy Volts, a 72% m/m decline, indicating a declining trend in EV battery demand and, therefore, demand for lithium-ion (Li-Ion) separations substrate, which we believe is an incremental negative for PPO as it is supplied to EV batteries used in Volt and comprises a material portion of the company's Li-ion margins. In addition, June Nissan leaf sales came in at 535 units, or growth of 4.9% m/m, following 510 units sold in May '12, or growth of 37.8% m/m, marking an acute slowdown in sales momentum (i.e., 4.9% growth in the most recent month vs. 37.8% in the prior month)."
Polypore International closed at $39.96 on Tuesday.
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