ArvinMeritor Shares Rise On Growth Expectations

NEW YORK (AP) — Shares of auto supplier ArvinMeritor Inc. got a boost Friday from predictions of growth once the global automotive industry begins to rebound.

In heavy afternoon trading, ArvinMeritor shares rose 27 cents, or 7.2 percent, to $4.02 after peaking at $4.39 earlier in the day. Over the past 52 weeks, the company's shares have traded between 32 cents $18.11.

Brian Johnson of Barclays Capital raised his rating for the Troy, Mich.-based company to "Overweight" and doubled his price target to $6, citing expectations of normalized earnings in 2011.

"While we expect volumes to remain at very depressed levels for a few more quarters, recent comments from Volvo indicate that the industry may have reached a bottom in North America and in Europe," Johnson wrote in a note to investors.

"This should relieve some of the pressure on ArvinMeritor's near-term earnings and cash flows, and makes us more comfortable looking at rebound earnings power and valuation."

Johnson said the company also could get a boost from the possible sale of part of its light vehicle systems business.