Jefferies is out with its own take on auto and auto parts makers following Tuesday's commentary from Goldman (here and here). Although the beats will be less dramatic than the Q1 average, the firm "sees a round of upside earnings reports," and flags Ford (F) and TRW Automotive (TRW) as top picks citing earnings growth potential and share buybacks respectively. Other stocks getting price target hikes include AXL, ALV, BWA, DAN, GNTX, LEA, and TEN.
American Axle (AXL +1%) will literally blow up a manufacturing facility in Detroit in the hopes that it will help the company unload the property it sits on. Talks are ongoing with potential buyers for the giant seven-complex facility.
A broad rally in auto supplier stocks isn't a shocker after positive news piled in from across the globe. In Europe, a long slide in sales has finally reversed while China is opening up the western part of its territory for manufacturers. Just to top it off quite nicely, consumer sentiment rose briskly in the U.S. Advancers: American Axle (AXL) +4.5%, Dana Holding (DAN) +4.1%, TRW Automotive (TRW) +2.2%, Navistar (NAV) +4.4%, Federal-Mogul (FDML) +4.2%, Magna International +1.9%, Meritor (MTOR) +2%, Johnson Controls (JCI) +1.9%, Exide Technologies (XIDE) +5.5%.
More Chinese companies are popping up in Detroit as they prepare for the eventuality of a major Chinese auto manufacturer selling cars in the U.S. For the most part, the firms are flying under the radar, but the numbers are starting to swell. The Detroit Chinese Business Association now has over 100 Chinese-owned businesses in its membership with the largest percentage geared toward supplying the automobile industry. It's a trend to watch for auto suppliers (AXL, ARMH, ALV, BWA, CLC, DAN, FDML, GNTX, JCI, MGA, TEN, TRW, WBC) used to having a home field advantage with the Big Three automakers.
More on American Axle's (AXL +6%) Q1: A "commitment to deliver improved profitability and launch performance globally," results in strong Q1 revenues that beat analysts' estimates even after a labor strike at GM's Rayong factory in Thailand subtracted ~$12.5M from total sales. Content-per-vehicle rises to $1,504 from $1,475 in Q1 2012. 2013's primary focus: the "flawless" launch of products "supporting GM's next-generation full-size pickup truck and SUV program [and] the RAM heavy duty pickup truck program." (PR)
American Axle & Mfg Holdings Inc manufactures, engineers, designs and validates driveline and drivetrain systems & related components & chassis modules for light trucks, sport utility vehicles, passenger cars, crossover vehicles & commercial vehicles.