Wolfe Trahan Published Research » Tim Denoyer

Under the Hood: January Truck Orders & December Engines

Wolfe Trahan — Mon, 06 Feb 2012 16:41:39 +0000

ACT Research reported Jan prelim Class 8 net orders of 25,200, between 30,293 in Dec and 20,603 in Nov. The Jan order pace implies an annual build rate of ~292K, down from the 350K order rate in Dec. The trailing 3- and 6-month annual order rates are both 296K-297K.

NAV: Analyst Day

Wolfe Trahan — Thu, 02 Feb 2012 14:25:52 +0000

We attended NAV’s investor meeting at its new HQ in Lisle, IL. Management’s tone was cautious with EPS guidance $5.00-$5.75 vs prior cons $5.92, Class 8 production guidance 10% below ACT Research, and uncertain cost headwinds from production downtime since 1/20 due to a recall of brakes (by Bendix).

PCAR 4Q Earnings: Weak Incremental Margins and Outlook Support Underperformance

Wolfe Trahan — Wed, 01 Feb 2012 15:21:56 +0000

PCAR reported 4Q:11 EPS of $0.91, above our $0.77 and Cons. $0.79, mostly on the top line but with slightly better margins than our est as well. PCAR’s $4.85B rev beat our $4.53B est from both NA and Europe, and its Truck segment gross margin expanded 30bp y/y, above our est of a 10bp drop.

Ford 4Q Earnings: Ford Misses and Sets a Low Bar for 2012

Wolfe Trahan — Mon, 30 Jan 2012 12:20:54 +0000

Ford reported 4Q EPS $0.20, below our $0.24 and Cons. $0.25, with pretax income missing by even more at $1.1B vs our $1.5B est. The 28% adjusted tax rate was closer to fully-taxed but below guidance of about 35%, helping EPS by $0.02. This is Ford’s 3rd miss in its past 5 reports.

Auto Sales Forecast: Interactive Model

Wolfe Trahan — Mon, 23 Jan 2012 18:50:35 +0000

Plug in your expectations for gas prices, household net worth, and vehicles per licensed driver, and the regression model projects future U.S. light vehicle sales.

An 8-Minute Update on Auto & Truck Outlook: Upgrading the Sector

Wolfe Trahan — Mon, 23 Jan 2012 18:47:26 +0000

We have raised our view on the Auto & Truck Manufacturing sector to bullish from neutral based on negative sentiment, attractive valuation and improving supply-demand fundamentals. This 8-minute audio brief accompanied by 6 slides and a excel doh! Model discusses our more bullish thesis on the sector, our new and improved U.S. auto sales forecast model and our stock picks. Our favorite stocks remain CMI, DAN, GM and NAV and the stocks we would avoid are PCAR, JCI and GT, but we have a clearly positive bias towards the group for the first half of 2012.

JCI: Premium Valuation Unchanged Despite Pullback

Wolfe Trahan — Fri, 20 Jan 2012 21:06:51 +0000

JCI reported $0.60 F1Q:12 EPS vs our and Cons $0.62 and guidance $0.60-$0.62, and cut F12 EPS guidance to $2.70-$2.85 from $2.85-$3.00 vs prior cons. $2.96. Mgmt also gave F2Q guidance of $0.52-$0.54 vs prior Cons $0.70.

Upgrading Sector to Overweight as Weak Sentiment Overlooks Improving Cyclical Outlook

Wolfe Trahan — Tue, 17 Jan 2012 06:26:59 +0000

Raising Auto & Truck Sector to Overweight from Market Weight. In C11, the avg stock in our coverage dropped 21% as avg EPS grew ~90%. Even after C12 Cons. EPS has dropped ~10% on avg= since mid-11, fwd P/E and EV/EBITDAP multiples are 24% and 10% below 10-yr avgs, making valuation attractive.

Under the Hood: CMI Class 8 Engine Share Hits 18-Month High

Wolfe Trahan — Wed, 04 Jan 2012 18:33:45 +0000

The NA Class 8 engine data released by Ward’s late Tuesday night show CMI share rising to 44.1% in Nov from 39.2% in Oct and exceeding its recent Aug peak of 43.9%. This was also CMI’s best share performance since June ’10, when PCAR and NAV started ramping up 13L engine production.

NAV: Margins Drive F4Q Earnings Beat Despite Production Miss

Wolfe Trahan — Wed, 21 Dec 2011 12:24:01 +0000

NAV reported F4Q adj. EPS of $3.37, above Cons. $3.18 and our $2.76. GAAP EPS of $3.48 was hurt by $43M ($0.59/shr) of restructuring and prior-period OPEB costs, but helped by $51M ($0.70/shr) of released tax valuation allowance.