On Oct 5, 2013, we upgraded
TRW Automotive Holdings Corp.
) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
TRW generated positive earnings surprise in each of the last 4
quarters with a positive earnings surprise of 10.99%. In the
second quarter of 2013, the company's earnings increased 17.4% to
$2.02 per share from $1.72 (all excluding special items) a year
ago and exceeded the Zacks Consensus Estimate of $1.70. Net
earnings (excluding special items) went up 14.0% to $252 million
from $221 million in the second quarter of 2012.
Since then, the Zacks Consensus Estimate for TRW's 2013
earnings per share increased 3 cents to $6.64, up 8.14% over
2012. Further, the estimate for 2014 also increased 3 cents to
$7.66, up 15.41% from the prior year.
The solid performance by TRW in second-quarter 2013, a strong
cash flow and expectation of better performance in the future
prompted Standard & Poor's (S&P) Ratings Services to
raise the company's credit rating to 'BBB-' from 'BB+' in Sep
TRW is globally recognized as one of the largest and most
diversified suppliers of automotive systems, modules and
components to OEMs and the related aftermarket. The company
commands about one-fifth of the world market for airbags,
seatbelts and related electronics.
However, we note that the broader economic and challenging
pricing environment along with high customer concentration remain
headwinds. TRW expects market conditions in Europe to remain
challenging in the near term.
For full year 2013, TRW anticipates production of 16.1 million
units in North America and 18.6 million units in Europe. Based on
these production levels, the company's first half performance and
expectations for foreign currency exchange rates, revenues for
the year are expected in the range of $16.8 billion to $17.0
billion, with $4.1 billion expected in the third quarter.
Other Stocks to Consider
Some other stocks worth considering in the original auto and
truck business are
Allison Transmission Holdings, Inc.
Fuel Systems Solutions, Inc.
). All these stocks carry a Zacks Rank #1 (Strong Buy).
ALLISON TRANSMN (ALSN): Free Stock Analysis
DENSO CORP (DNZOY): Get Free Report
FUEL SYSTEM SOL (FSYS): Free Stock Analysis
TRW AUTOMTV HLD (TRW): Free Stock Analysis
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