Navistar (NAV) Gains on Truck & Bus Demand Amid High Costs

An image of a pair of glasses on a newspaper
Credit: Shutterstock photo

On Dec 27, we issued an updated research report on Navistar International CorporationNAV .

Increased demand for Class 6/8 trucks and buses helped Navistar to witness an increase in volumes across the United States and Canada. During fourth-quarter fiscal 2018, robust demand across markets aided the company to grow its market share in every vehicle segment, both on a sequential and year-over-year basis. In fact, Navistar saw a year-over-year increase in revenues and earnings per share in the quarter. Moreover, both earnings and revenues surpassed the respective Zacks Consensus Estimate.

The Lisle, IL-based commercial vehicle manufacturer launched new truck products to cater to increasing demand for new products. In the last fiscal, the LT series and A26 engines helped the company grow its Class 8 heavy market share. A wide product portfolio across its business units will drive the company's sales. Its lately launched HV and MV series for medium duty and vocational segments are expected to further boost the top line.

Navistar International Corporation Price and Consensus

Navistar International Corporation Price and Consensus | Navistar International Corporation Quote

Navistar expects the same trend witnessed in fiscal 2018 to continue in fiscal 2019 as well, driven by high replacement demand and growth in key economic sectors. In the industry, the company projects retail deliveries of Class 6-8 trucks and buses in the United States, and Canada between 395,000 units and 425,000 units in the current fiscal. Further, it anticipates revenues for fiscal 2019 within $10.75-$11.25 billion and adjusted EBITDA in the range of $850-$900 million.

Higher volumes across all business units strengthened Navistar's cash flow in fiscal 2018. An improved free cash flow by offloading its debts and interest expenses strengthens the company's balance sheet, thus generating superior shareholder value. During the last reported quarter, its cash and cash equivalents improved to $1.3 billion from $706 million in the prior fiscal.

However, a continued rise in premium freight and commodity costs, along with product development and engineering expenses are straining the company's profit margin. Further, Navistar incurs additional costs to develop products that are in sync with the changing emission standards, which further increase product manufacturing costs.

The Zacks Consensus Estimate for fiscal 2019 has moved down 0.3% over the past seven days. The stock has lost 31.9% compared with its industry 's decline of 26.5% in the past three months. It currently holds a Zacks Rank #3 (Hold).

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Stocks to Consider

Some better-ranked stocks in the auto space are Fox Factory Holding Corporation FOXF , Allison Transmission Holdings, Inc. ALSN and Cooper Tire & Rubber Company CTB . Fox Factory and Allison Transmission currently sport a Zacks Rank of 1 while Cooper Tire carries a Zacks Rank #2 (Buy).

Fox Factory has an expected long-term growth rate of 5%. Shares of the company have gained 24.6% in the past three months.

Allison Transmission has an expected long-term growth rate of 10%. Shares of the company have increased 7.8% in the past three months.

Cooper Tire has an expected long-term growth rate of 4%. Over the past three months, shares of the company have gained 12.1%.

Will You Make a Fortune on the Shift to Electric Cars?

Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.

With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.

It's not the one you think.

See This Ticker Free >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Fox Factory Holding Corp. (FOXF): Free Stock Analysis Report

Navistar International Corporation (NAV): Free Stock Analysis Report

Allison Transmission Holdings, Inc. (ALSN): Free Stock Analysis Report

Cooper Tire & Rubber Company (CTB): Free Stock Analysis Report

To read this article on click here.

Zacks Investment Research

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.

In This Story


Other Topics


Latest Markets Videos


    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at

    Learn More