Meritor, Inc. (MTOR) - Bear of the Day
09 December 2011 - 11:00AM
Zacks
Meritor, Inc. (MTOR) is a globally recognized automotive
parts supplier. However, the company has high customer
concentration, which implies limited scope for margin expansion.
Further, the recent turmoil in the global economy is expected to
continue to mar its results.
We are also disappointed about Meritor's deteriorating cash
flow. Although the company's fiscal fourth quarter profit was ahead
of the Zacks Consensus Estimate by $0.19 per share, we remain
concerned about its long-term outlook.
Our long-term Underperform recommendation on the stock indicates
that it will perform lower than the broader market. Our $5.50
target price, 3.8X our 2012 EPS estimate, reflects this view.
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