Susquehanna Downgraded Tenneco to ‘Neutral’

Price movement

Tenneco (TEN) has a market cap of $3.7 billion. It fell 1.7% and closed at $67.33 per share on January 26, 2017. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 1.4%, 6.5%, and 7.8%, respectively, on the same day. Tenneco is trading 2.9% above its 20-day moving average, 7.1% above its 50-day moving average, and 20.3% above its 200-day moving average.

Susquehanna Downgraded Tenneco to ‘Neutral’

Related ETF and peers

The iShares Dow Jones US Consumer Goods Sector Index Fund (IYK) invests 0.14% of its holdings in Tenneco. IYK’s YTD price movement was 3.3% on January 26.

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

  • Cummins (CMI) – $24.7 billion
  • Lear (LEA) – $10.1 billion
  • BorgWarner (BWA) – $8.7 billion

Tenneco’s rating

Susquehanna downgraded Tenneco’s rating to “neutral” from “positive.”

Performance in 3Q16

Tenneco reported 3Q16 net sales and operating revenue of $2.1 billion—a rise of 5.0% compared to net sales and operating revenue of $2.0 billion in 3Q15. The rise was due to higher global light vehicle sales. The value-added revenue of the Clean Air division, the substrate sales of the Clean Air division, and the value-added revenue of the Ride Performance division rose 4.6%, 1.9%, and 3.1%, respectively, between 3Q15 and 3Q16.

Its net income and EPS (earnings per share) rose to $180.0 million and $3.21, respectively, in 3Q16—compared to $52.0 million and $0.88, respectively, in 3Q15. It reported non-GAAP[1. generally accepted accounting principles] EBITDA[2. earnings before interest, tax, depreciation, and amortization] and non-GAAP EPS of $212.0 million and $1.53, respectively, in 3Q16—a rise of 6.0% and 25.4%, respectively, over 3Q15.

Tenneco’s cash and cash equivalents and inventories rose 12.9% and 10.4%, respectively, between 4Q15 and 3Q16.

Tenneco expects total revenue growth of 3% and 6% for 4Q16 and 2016, respectively.

In the next part, we’ll look at PVH Corporation (PVH).