Barrington Questions What Navistar is Worth to a Strategic Buyer

Barrington Research has published a research report on Navistar International

with an unchanged investment thesis. In the report, Barrington writes, "Our investment thesis is unchanged following the Q2/12 earnings release and today's negative U.S. Court of Appeals ruling regarding the EPA's interim ruling that allowed NAV to pay NCPs. NAV's low valuation and prospects as an acquisition target should support the stock at the current levels. We believe that the EPA final ruling will allow NAV to continue paying NCPs and that the 13L 2010 EPA certification should happen soon. Whatever the time frame, we know that the EPA overhang will continue to impact 2012 profitability and market share, creating uncertainty about NAV's chances for long-term success. As a result, we are lowering NAV's 2012 EPS below management's guidance. Speculative upside we see in the stock is due to the combination of activist shareholders involved in the shares. Potential synergistic truck buyers like VW or Fiat might go for a takeover to gain a larger share in the North American truck market." Barrington maintains its Outperform rating on Navistar, which is currently trading down $3.09 from yesterday's $28.74 closing price.