Story updated at 9:55 am.m to reflect market activity.
Shares of Meritor were gaining 0.7% to $13.95 in morning trading.
Analyst Brian A. Johnson said the auto parts company's margins tracked ahead of plans, despite its flat revenue. "The ongoing self-help story should provide upside earnings potential as volumes improve (MTOR now expects to hit 10% EBITDA margins in FY'16 despite lower revenues)," Johnson wrote.
The analyst continued, "We attribute the better-than-expected margin performance to ongoing self-help improvements related to material performance, labor/burden performance, and pricing actions. Despite margins tracking ahead of plan, we remain optimistic on potential margin upside as profitability improves in Europe, Aftermarket & Trailer margins get a boost from the Mascot divestiture, and the company continues to convert on incremental revenue."
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Separately, TheStreet Ratings team rates MERITOR INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate MERITOR INC (MTOR) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, compelling growth in net income and good cash flow from operations. However, as a counter to these strengths, we find that revenues have generally been declining."