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BMO Capital and Susquehanna Have Rated Gentex

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Price movement

Gentex (GNTX) fell 0.10% to close at $20.05 per share during the third week of December 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -0.10%, 8.9%, and 28.0%, respectively, as of December 23.

GNTX is trading 3.1% above its 20-day moving average, 10.7% above its 50-day moving average, and 19.1% above its 200-day moving average.

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Related ETF and peers

The Vanguard S&P Mid-Cap 400 Growth ETF (IVOG) invests 0.40% of its holdings in Gentex. The YTD price movement of IVOG was 14.1% on December 23.

The market caps of Gentex’s competitors are as follows:

  • Cintas (CTAS): $12.2 billion
  • Autoliv (ALV): $9.8 billion
  • Lear (LEA): $9.3 billion

GNTX’s rating

On December 21, 2016, BMO Capital initiated coverage of Gentex with an “outperform” rating and set the stock’s price target at $24 per share.

On December 19, 2016, Susquehanna initiated coverage of Gentex with a “neutral” rating and set the stock’s price target at $21 per share.

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Performance of Gentex in 3Q16

Gentex reported 3Q16 net sales of $429.6 million, a rise of 10.2% compared to $389.8 million in 3Q15 due to auto-dimming mirror unit shipments. The company’s gross profit margin and operating margin rose 150 bps (basis points) and 140 bps, respectively, in 3Q16 compared to 3Q15.

The rise in Gentex’s gross margin was due to the reduction in purchasing costs and a favorable product mix. However, the rise was offset by annual customer price reductions.

Gentex’s net income and EPS (earnings per share) rose to $92.1 million and $0.32, respectively, in 3Q16 compared to $78.3 million and $0.27, respectively, in 3Q15.

The company’s cash and cash equivalents fell 3.1%, and its inventories rose 2.7% in 3Q16 compared to 4Q15.

Quarterly dividend

Gentex has declared a quarterly cash dividend of $0.09 per share on its common stock. The dividend will be paid on January 18, 2017, to shareholders of record at the close of business on January 6, 2017.

Projections

The company made the following projections for fiscal 2016:

  • net sales of $1.7 billion–$1.71 billion
  • gross margin of 39.3%–39.7%
  • tax rate of 31.5%–32.5%
  • capital expenditure of $115 million–$130 million

In the next part, we’ll look at BorgWarner (BWA).

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