Auto Parts Shares Up, Led by ArvinMeritor

ArvinMeritor Inc. led the auto parts sector higher on Friday, soaring 15 percent on a stock ratings upgrade from Goldman Sachs, reported the Associated Press.
ArvinMeritor shares rose $1.99 to $15.41 in afternoon trading on the New York Stock Exchange, where it has been moved in a $11.74 to $22.74 yearly range. All figures in U.S. dollars.
Goldman Sachs raised its rating on ArvinMeritor to “In-Line” from “Underperform” to reflect a more attractive valuation and diminished downside risk.
An analyst did note that ArvinMeritor’s stock price had fallen 25 percent over the past three months, and now trades at a discount relative to its peers on a number of the investment bank’s key valuation metrics.
The analyst said Tenneco Automotive Inc. should be viewed favourably as it has managed to capture substantially all of the domestic light diesel business. It’s a small market consisting mostly of heavy-duty pickups, he noted, but said it should add substantial incremental revenue for Tenneco beginning in 2007.
Tenneco shares added 39 cents, or 2.2 percent, to $18.01 on the NYSE.
Elsewhere in the sector, Hayes Lemmerz International Inc. surged 22 percent, picking up 69 cents to $3.81 on the Nasdaq, despite posting late Thursday a wider third-quarter loss and cutting its anticipated 2005 revenue.
Merrill Lynch Analyst, which rates the stock a “Sell,” said Hayes Lemmerz’s third-quarter EBITDA, or earnings before interest taxes depreciation and amortization, beat the investment bank’s predictions but Analyst John Murphy noted tough times are expected to continue on lower production from the nation’s Big Three automakers.
A handful of other stocks in the sector posted solid increases, with American Axle & Manufacturing Holdings Inc., Lear Corp., and Magna International Inc. among the leading gainers.
American Axle climbed 5 percent, adding on 90 cents to $19.09, while Lear rose 3.5 percent, or 97 cents, to $28.56 and Magna gained $1.29, or 2 percent, to $67.40. All three trade on the New York Stock Exchange.