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Goldman Sees Cooper-Standard Shares 'Near Fair Value'

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Goldman Sees Cooper-Standard Shares 'Near Fair Value'
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Goldman Sachs sees shares of Cooper-Standard Holdings Inc (NYSE: CPS) near "fair value" and has initiated coverage of the stock with a Neutral rating and $95 price target, implying 15 percent upside.

Cooper-Standard makes sealing, fuel and brake delivery, fluid transfer and anti-vibration systems for the automotive industry.

"Overall, we see CPS as a solid margin expansion story predicated on a multi-year operational turnaround and plant re-footprinting following the installation of a new management team," analyst Patrick Archambault wrote in a note.

However, the analyst noted that some top-line revenue benefit from increasing global platforms is offset by a leveling North American auto cycle, accounting for 53 percent of revenue.

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"So, despite company specific cost actions and a positive fundamental backdrop, with shares trading close to fair value relative to peers, we initiate on CPS at Neutral," Archambault said.

The analyst expects a three-year revenue, adj. EBITDA and EPS CAGRs of 3 percent, 10 percent and 10 percent, primarily driven by margin expansion. The company's margins will be aided by moving plants to lower-cost countries, improving operational efficiency and new business wins, which are expected to fill excess plant capacity in China.

Archambault forecast 2016 EPS of $9.79 on revenue of $3.457 billion. Street expects earnings of $8.71 a share on revenue of $3.44 billion.

At the time of writing, shares of Cooper-Standard were down 1.58 percent at $81.63.

Latest Ratings for CPS

DateFirmActionFromTo
Nov 2016Goldman SachsUpgradesNeutralBuy
Oct 2016JefferiesDowngradesBuyHold
Sep 2016Buckingham ResearchDowngradesBuyNeutral

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