Deutsche Bank Sees Lear as Top Pick (LEA)

Deutsche Bank is out with an auto update in which they note Lear (NYSE: LEA) is a top pick.In a note to clients, Deutsche Bank writes, "We continue to highlight Lear as a top pick for the following reasons: Our target price of $115, based on 5.0x EV / 2012 EBITDAP implies 28% upside from current levels. Our target price does not incorporate several additional sources of value, including LEA's stake in its former interior components business ($3.50 per share), the value of its China JV's ($7.00 per share), or the value of its NOL's ($7.00 per share). We are incorporating significant conservatism in our forward estimates, as we are only incorporating 2011 / 2012 incremental EBITDA margins of 7% / 11% (vs 2010 incremental margin of 22%). Incremental margins of 15% / 15% would imply 2012 EBITDA of $1.15 bn, compared to our current forecast of $1.03 bn."LEA is trading at $90.92.