ARM’s Growth Prospects Undervalued
Analysts at Goldman Sachs reiterate their "buy" rating on ArvinMeritor Inc (NYSE: ARM), while raising their estimates for the company. The target price for ARM has been raised from $19 to $21.
ARM has reported its Q2 EPS marginally short of the estimates, but ahead of the consensus. “We continue to see ARM as having among the best growth prospects in our coverage. The company is already benefiting from substantial sales growth in its emerging markets truck business which we believe almost doubled from last year in Q2, driven by robust China/India/Brazil domestic activity and government sponsored infrastructure programs,” the analysts mention. The analysts believe that ARM’s shares are not fully reflecting the company’s growth prospects.
Goldman Sachs has raised its EPS estimates for 2011 and 2012 from $1.47 to $1.67 and from $2.32 to $2.69, respectively, to reflect the company’s ability to leverage its $875mn in deferred tax assets in the US and Europe as those regions return to profitability. More Analyst Ratings here
