UPDATE: Credit Suisse Initiates Coverage on Commercial Vehicle Group with Neutral Rating, $9 PT
In a report published Wednesday, Credit Suisse initiated coverage on Commercial Vehicle Group (NASDAQ: CVGI) with a Neutral rating and a $9.00 price target.
Credit Suisse noted, “We are initiating on Commercial Vehicles Group with a Neutral rating and a $9 target price. Given the current softness in the NA heavy-duty truck market (~40% of sales), we believe that it is too early to become constructive on CVGI. While the worst in orders is likely behind us, we do not expect a meaningful acceleration in the near-term. Construction markets (~25% of sales) will make up for some of the shortfall, but not be enough to offset a declining NA H/D market. Furthermore, the higher-margin and more defensive aftermarket only makes up ~15% of sales; therefore, while trucks age and aftermarket sales will probably increase, it is unlikely to make enough of an impact to drive EPS higher in 2013.”
Commercial Vehicle Group closed on Tuesday at $8.27.
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