UPDATE: J.P. Morgan Reiterates Overweight Rating, Lowers PT on Gentex Corporation

In a report published Monday, J.P. Morgan & Co. reiterated its Overweight rating on Gentex Corporation GNTX, but slightly lowered its price target from $22.00 to $21.00. J.P. Morgan noted, “GNTX is the world's leading provider of electrochromatic auto-dimming mirrors, a market it created, as well as value-add products and technologies it has incorporated into the mirror, including – most recently – rear camera displays. We view GNTX as a highly innovative technology company that happens to operate within the auto parts sector. Through the constant development of new products and technologies, it has generated a 20% revenue CAGR over past 25 years. Rather than pursuing growth at the expense of margin, GNTX's rapid sales growth through the development of new products and features on existing products has allowed it to offset annual customer price-downs, protecting EBITDA margins, which at 25% are ~2.5x the sector average and significantly above that of even next highest BWA at 16%. GNTX stands to benefit from pending legislation requiring backup camera protection, although we acknowledge growth prospects near-term are now more muted nearterm by potential placement of rear camera displays in areas of the car other than the rear-view mirror. Its high Europe exposure presents risk, but not as much as commonly supposed, in our view, given solid intra-Europe customer mix and US dollar denominated contracts” Gentex Corporation closed on Friday at $18.14.