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Research Alert: CFRA Reiterates Buy Opinion On Shares Of Adient Plc

· 02/05/2021 03:19

08:15 AM EST, 02/05/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We increase our 12-month target price by $10 to $50, based on a FY 22 (Sep.) P/E of 11.0x, above the stock's five-year mean P/E of 9.6x, justified by recent balance sheet improvement. We raise our adjusted EPS estimates by $1.20 to $4.30 for FY 21 and by $0.75 to $4.55 for FY 22. ADNT posts Dec-Q adjusted EPS of $1.71 vs. $0.96 (+78.1%), well ahead of the $0.88 consensus. Impressively, ADNT achieved the massive earnings beat despite a 2.2% decline in revenue to $3.85B ($10M ahead of consensus), because adjusted EBITDA margin expanded 230 bps to 9.8%, driven by the EMEA (+400 bps) and Americas (+250 bps) regions. ADNT reiterated prior FY 21 guidance. ADNT has deleveraged its balance sheet significantly over the past few quarters through asset sales and a rebound in free cash flow. Net debt stood at only $2.54B versus $1.82B of cash at quarter-end. We especially like ADNT's leverage to rebounding global auto production and view the stock as a highly cyclical, high-beta (5-year avg. beta = 3.34) automotive play.