Bank of America Reiterates Buy Rating, $25 PT on Standard Motor Products on Solid 4Q12 Results

In a report published Monday, Bank of America reiterated its Buy rating and $25.00 price target on Standard Motor Products

. Bank of America noted, “SMP reported 4Q12 continuing ops. EPS of $0.28, ahead of our $0.25 estimate and consensus of $0.22. GAAP EPS of $0.27 included a $658K pre-tax restructuring charge and a $240K gain from the sale of land, which netted to a $0.01/sh hit to EPS. The operating beat in the quarter versus our forecasts was driven by solid cost execution, as sales growth of 10.4% YoY, to $192mm (BofAMLe $199mm), was strong, but below our forecasts. Specifically, gross margin of 30.1% (BofAMLe 28.6%) exceeded our forecast and, coupled with inline SG&A as a % of sales of 23.5%, drove an adjusted operating margin of 6.7% (BofAMLe 5.1%), which was impressive. We expect SMP to continue delivering solid results, as the combination of an aging US vehicle fleet and a recovery in miles driven support demand for replacement engine and temperature-related components. We also believe that recent acquisitions will bolster SMP's value line Engine offerings, while further strengthening its Temperature Control foothold in compressor manufacturing.” Standard Motor Products closed on Friday at $25.02.