[ET Net News Agency, 6 February 2020] Nomura raised its target price for Nexteer
Automotive (01316) to HK$8.2 from HK$7 and upgraded its rating to "buy" from "neutral".
The research house believes FY2019 should represent a trough of Nexteer's earnings, and
Nomura sees multiple engines to drive an earnings turnaround starting this year.
But it trimmed its FY2019 US revenue/net profit by US$100mn/28mn to reflect an order
loss as a result of the GM labor strike during five weeks in October-November 2019.
It noted that utilization of the Saginaw site has shown signs of normalization since
December 2019 as subsequent production makes good for the work stoppage. This, coupled
with the diminishing impact of losses in the column business that Nomura expects starting
2Q 2020, implies that Nexteer's US revenue growth will again turn positive this year. (KL)