Navistar Addresses Investors' Concerns

Analysts have recently turned in favor of Navistar (NAV), the truck manufacturer, after the company made a secondary offering that has addressed some of the questions regarding liquidity. Also, the street seems to be excited about the management's transition plan which is now more attainable after the improved liquidity status. There are 5-6 important catalysts that are expected to move the stock such as initiation of Cummins (CMI) manufactured engines in January, their EPA approval, reduction in engine losses, realization of savings through the cost-cutting program and improvement in truck net price realization. It becomes clear why Baird has recently upgraded NAV from Neutral to Outperform.

The stock was recently upgraded by Baird due to its cheap valuations. Baird has raised the price target from $20 to $30. The company's earnings are expected to grow by 5% per annum for the next five years. We are bullish on the stock as most of the investor concerns have been addressed by the company's management. Read more