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UPDATE: Goldman Sachs Downgrades Standard Motor Products on Likely Earnings Growth Deceleration

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In a report published Tuesday, Goldman Sachs analyst Patrick Archambault downgraded Standard Motor Products (NYSE: SMP) to Sell, but reiterated the $34.00 price target.

In the report, Goldman Sachs noted, “We downgrade Standard Motor Products to Sell with 9% downside to our six month price target of $34 vs. 10% average upside for our coverage. The company has exhibited solid operational execution and successfully integrated a number of acquisitions over the last 12 months and the shares have risen 206% since the June 2012 trough (vs. the S&P up 28%). However, this has driven Standard Motor's NTM P/E to 15.5x from 7.6x, which is approximately 30% above peers even though we see the company sitting at the bottom of our stock ranking framework based on growth, expectations, and end market positioning. Our 2013 and 2014 EPS estimates of $2.22 and $2.45 are 2% and 3% below consensus, respectively, relative to mid-single digit upside across our sector.”

Standard Motor Products closed on Monday at $37.64.

Posted-In: Goldman Sachs Patrick ArchambaultAnalyst Color Downgrades Analyst Ratings


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