JP Morgan Comments on Navistar International, ICT Technology
J.P. Morgan provided color on Navistar International (NYSE: NAV) in a research report published today following the company's engine technology strategy announcement and conference call. J.P. Morgan has a Neutral rating and $30 price target on Navistar.
In the report, J.P. Morgan stated, "NAV engines are monitoring calibration already. The technology looks workable, and we note variations of SCR already in-use in Brazil (on smaller engines). NAV's big bore engines will still have to tested for millions of miles and will have to obtain EPA approval, which could take time. A key question, in our view, is what happens to the residual value of current trucks with Advanced EGR engines? Why would customers buy current models vs. wait until next year's SCR engines are available?"
Later in the report, J.P. Morgan noted, "While NAV could ultimately see stability (or even growth) in share over time if the ICT+ system is successful, significant execution risks remain, including timing, cost, and liquidity issues."
Shares of Navistar were trading at $25.08 at the time of posting, down 12.89 percent from Thursday's market close.
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