JP Morgan Maintains Underweight on Navistar After US Court of Appeals Ruling

JP Morgan has published a research on Navistar

after the US Court of Appeals ruled against the EPA, ruling in favor of Navistar's competitors. In the report, JP Morgan writes, "The U.S. Court Of Appeals ruled in favor of NAV's competitors in their lawsuit against the EPA today, essentially eliminating the Interim Final Rule (IFR) which allowed for Non-Compliance Penalties (NCPs) for each engine produced that does not comply with the EPA's 0.2 NOx standard. This could be a near-term negative for NAV, as we believe the company has focused any remaining emissions credits on a handful of U.S. states but in the others (~40 states), the company may be forced to stop producing its 13-L engine. The EPA does have a Final Rule in the works, or could grant approval to NAV's 13-L engine in the near-term, which would mitigate the negative effect of today's ruling." JP Morgan maintains its Underweight rating on Navistar, which is currently trading down $3.28 from yesterday's $28.74 closing price.