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Cooper-Standard (CPS) Banks on Cost Savings & New Businesses

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We issued an updated research report on Cooper-Standard Holdings Inc.CPS on Aug 27.

Though this Novi, MI-based company reported an earnings miss in second-quarter 2018, it improved year over year. This year-over-year improvement was due to rise in operating efficiency and decline in selling, general, administrative, and engineering (SGA&E) expenses, which were partly offset by customer price reductions, unfavorable volume and mix, and high material costs.

Cooper-Standard is well placed, in terms of generation of business, and is in line with its cost-saving initiatives and lowering SGA&E expenses. Moreover, the company anticipates better performance in the second half of 2018 due to better volume and mix of vehicle production, particularly in North America.

Over the past three months, shares of Cooper-Standard have underperformed the industry it belongs to. Over this time frame, shares of the company have increased 15.2% against the industry's decrease of 7.4%. Further, the Zacks Consensus Estimate for both the current quarter and current year earnings has increased over the past month.

In the first half of 2018, Cooper Standard's sales reached $1.9 billion, up around 4.7% year over year. The strong sales growth has been recorded mainly due to favorable exchange rate fluctuations, primarily in Europe and Asia. The company anticipates sales of $3.60-$3.70 billion in 2018, up from the prior guidance of $3.55-$3.60 billion.

However, economic and geopolitical uncertainties, pricing pressures, and commodity cost inflation are headwinds before Cooper Standard.

Zacks Rank & Key Picks

Cooper-Standard currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Fox Factory Holding Corporation FOXF , Honda Motor Co., Ltd. HMC and AB Volvo VLVLY . While Fox Factory sports a Zacks Rank #1 (Strong Buy), both Honda and Volvo carry a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here .

Fox Factory has an expected long-term growth rate of 16.8%. Over a year, shares of the company have gained 64.5%.

Honda has an expected long-term growth rate of 3%. Shares of the company have risen 9.2% in the past year.

AB Volvo has an expected long-term growth rate of 15%. Over the past year, shares of the company have gained 3.6%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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