ArvinMeritor Stays in Neutral

Tags: arm
20 Nov 3:37am
Posted by ZacksResearch
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ArvinMeritor, Inc. (ARM) has earned a leading position in most of the markets it serves. Presently, the company is planning to spin off its Light Vehicle Systems (LVS) business. The company is undergoing dramatic cost reductions through its profit improvement initiative 'Performance Plus.' It is also expanding geographically and outsourcing to low-cost countries.

However, difficult conditions in North American and West European automotive markets are primary concerns for the company. Downturn in the auto industry, which took automakers such as General Motors Corporation (GM) on the verge of bankruptcy, makes us apprehensive about the near term prospects for auto suppliers such as ARM.

Production cuts, coupled with rising steel and fuel prices, lead us to rate the shares a Hold with a target price of $3.00.

Read the full analyst report on ARM.

Read the full analyst report on GM.



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