Advertisement
UK markets close in 48 minutes

  • FTSE 100

    8,065.29
    +24.91 (+0.31%)
     

  • FTSE 250

    19,599.25
    -120.12 (-0.61%)
     

  • AIM

    752.70
    -1.99 (-0.26%)
     

  • GBP/EUR

    1.1656
    +0.0011 (+0.10%)
     

  • GBP/USD

    1.2494
    +0.0031 (+0.25%)
     

  • Bitcoin GBP

    50,858.67
    -1,175.71 (-2.26%)
     

  • CMC Crypto 200

    1,379.54
    -3.04 (-0.22%)
     

  • S&P 500

    5,000.09
    -71.54 (-1.41%)
     

  • DOW

    37,780.59
    -680.33 (-1.77%)
     

  • CRUDE OIL

    82.28
    -0.53 (-0.64%)
     

  • GOLD FUTURES

    2,342.30
    +3.90 (+0.17%)
     

  • NIKKEI 225

    37,628.48
    -831.60 (-2.16%)
     

  • HANG SENG

    17,284.54
    +83.27 (+0.48%)
     

  • DAX

    17,877.43
    -211.27 (-1.17%)
     

  • CAC 40

    7,997.94
    -93.92 (-1.16%)
     
Stocks:

Trending tickers

Microsoft, Alphabet, Anglo American, IBM, Astrazeneca, Unilever and Sainsbury's

Meritor's TransPower Buyout to Fuel Commercial EV Growth

Zacks Equity Research

Meritor, Inc. MTOR recently announced the acquisition of all the outstanding common shares of Transportation Power, Inc. ("TransPower"), enabling the company to further position itself as a leading supplier of electrification technologies for commercial vehicles.

While Meritor has successfully executed its three-year M2019 program, the addition of TransPower's product portfolio is in sync with the company's M2022 priorities that focus on new business opportunities, margin expansion, and cost-containment initiatives. It also sets out the value of Meritor's Blue Horizon brand, which represents the company's emerging advanced technology platform centered on electrification. Per the M2022 goals, the firm is expected to attain 75% free cash-flow conversion and remain committed to return money to its shareholders.

Meritor had first announced investments in TransPower in December 2017, in order to accelerate the introduction of its flexible electric axle platform for various drivetrain configurations, including full electric, hybrid, single or tandem axles. It also announced a further strategic investment in TransPower last April in a bid to advance the development of transformative electrification technologies for the electrification of commercial vehicle industry.

Meanwhile, in 2019, the company announced 22 electrification programs with global OEMs that are expected to put nearly 130 fully-electric medium and heavy-duty commercial trucks on road through 2020. The company is likely to gain from higher margins tied to OEM adoption of advanced products, such as eAxle, air disc brakes and precision gearing.

ADVERTISEMENT

In addition, Meritor’s buyout of AxleTech has boosted its growth. This buyout led to the introduction of a complementary product portfolio, providing the company with a full line of independent suspensions, material handling axles, new braking solutions and drivetrain components. It also diversified Meritor’s exposure in adjacent end markets served, which will support its target of realizing more than $15 million in annual cost synergies by fiscal 2020.

Shares of Meritor have outperformed the industry it belongs to over the past year. During this time frame, it has gained 25.4%, as against the industry’s rise of 10.2%.

In fiscal 2020, Meritor expects sales in the $3.7-$3.8 billion range. Net income from continuing operations is anticipated in the band of $145-$155 million. Adjusted earnings per share from continuing operations are projected at $2.75-$2.85.

Zacks Rank & Stocks to Consider

Currently, Meritor carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector include Blue Bird Corporation BLBD, Tesla, Inc. TSLA and SPX Corporation SPXC, each carrying a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Blue Bird has an estimated earnings growth rate of 25.47% for 2020. The company’s shares have appreciated 7.6% in a year’s time.

Tesla has a projected earnings growth rate of 6,380% for the ongoing year. Its shares have gained 68.9% over the past year.

SPX has an expected earnings growth rate of 8.09% for the current year. The stock has surged 74.4% in the past year.

Biggest Tech Breakthrough in a Generation

Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.

A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.

See 8 breakthrough stocks now>>


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
 
Tesla, Inc. (TSLA) : Free Stock Analysis Report
 
Blue Bird Corporation (BLBD) : Free Stock Analysis Report
 
Meritor, Inc. (MTOR) : Free Stock Analysis Report
 
SPX Corporation (SPXC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.