NEW YORK (TheStreet) -- Shares of Navistar International Corp. (NAV) are up 4.6% to $30.44 as JP Morgan maintained its "overweight" rating, saying the selloff following its fourth quarter earnings release yesterday is over done.
"We believe the selloff is over done with the stock down 11% versus the S&P 500 up 1%," JP Morgan said.
Shares of Navistar plunged over 17% yesterday after the Illinois-based truckmaker recorded a net loss of $72 million, or 88 cents a share, compared to a loss of $154 million, or $1.91, a year earlier. Analysts had anticipated profit of $3.57 million, according to data compiled by Bloomberg.
Revenue was $3.01 billion, compared to a $3.03 billion estimate.
The net loss for the quarter marked the company's ninth losing period as it restructures its North American business. Recently, the company announced plans to close its block and head foundry operations in Indianapolis, a move that resulted in an $11 million charge during the period.
Separately, TheStreet Ratings team rates NAVISTAR INTERNATIONAL CORP as a Sell with a ratings score of D+. TheStreet Ratings Team has this to say about their recommendation:
"We rate NAVISTAR INTERNATIONAL CORP (NAV) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow, generally disappointing historical performance in the stock itself and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly decreased to -$18.00 million or 123.37% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- NAV has underperformed the S&P 500 Index, declining 7.31% from its price level of one year ago. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
- The gross profit margin for NAVISTAR INTERNATIONAL CORP is rather low; currently it is at 17.51%. Regardless of NAV's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -0.07% trails the industry average.
- NAV, with its decline in revenue, slightly underperformed the industry average of 2.8%. Since the same quarter one year prior, revenues slightly dropped by 0.6%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- NAVISTAR INTERNATIONAL CORP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, NAVISTAR INTERNATIONAL CORP continued to lose money by earning -$10.65 versus -$42.58 in the prior year. This year, the market expects an improvement in earnings (-$6.67 versus -$10.65).
- You can view the full analysis from the report here: NAV Ratings Report