UPDATE: J.P. Morgan Reiterates Overweight Rating, Lowers PT
In a report published Monday, J.P. Morgan & Co. reiterated its Overweight rating on Harman International Industries (NYSE: HAR), but slightly lowered its price target from $60.00 to $59.00.
J.P. Morgan noted, “HAR is a leading provider of automotive infotainment, automotive audio, and professional audio devices and services. Our Overweight rating is driven by strong leverage to industry secular growth themes, best-in-class earnings growth and toptier revenue growth, and shares that attractively trade at a relatively low premium to other parts suppliers and toward the low end of their own historical valuation range. HAR is thoroughly restructured and ready for the next stage in the company's growth, which is being driven by the secular rise in penetration of embedded infotainment systems, integration of active safety features into the infotainment system, and aggressive growth in emerging markets. While expanding its lead with high-end German luxury automakers, HAR is also winning new business with American and Japanese customers in more mainstream higher volume segments, and infotainment and high-end audio penetration stands to benefit from richer vehicle mix and option rates in developing nations. Several years ago, HAR took a clean sheet of paper to system design, moving to a new “scalable” rather than custom approach, which significantly cuts development cost and speeds time to market. As a result, we expect the expansion into more mainstream segments at lower price points to be margin rate accretive.”
Harman International Industries closed on Friday at $42.08.
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Tags: J.P. Morgan & Co.