Navistar International Corp (NYSE:NAV) announced that it has formed a wide-ranging strategic alliance with Volkswagen Truck & Bus,which includes an equity investment in Navistar by Volkswagen Truck & Bus and framework agreements for strategic technology and supply collaboration and a procurement joint venture.
The agreements expected to be entered into in connection with the alliance will enable Navistar to offer customers expanded access to leading-edge products and services through collaboration on technology and the licensing and supply of Volkswagen Truck & Bus’s products and components, while better optimizing its product development spend. The alliance will also strengthen Navistar’s liquidity position. In addition, the procurement joint venture is expected to leverage the purchasing power of Volkswagen Truck & Bus’s three major truck brands, Scania, MAN and Volkswagen Caminhões e Ônibus, in addition to Navistar’s own International® and IC Bus brands, providing Navistar with enhanced global scale.
“We are very pleased to partner with a global leader who shares our view of the world, in an alliance that will deliver multiple benefits and is consistent with our open-integration strategy,” said Troy Clarke, President and CEO, Navistar. “Starting in the near term, this alliance will benefit our purchasing operations through global scope and scale. Over the longer term, it is intended to expand the technology options we are able to offer our customers by leveraging the best of both companies and enabling Navistar to deliver enhanced uptime. Volkswagen Truck & Bus’s equity investment will strengthen our liquidity position and expand our financial flexibility, while aligning us with a valuable strategic partner.”
“Closer collaboration among our existing brands was a top priority for our commercial vehicles business and we are well on track in this context,” said Andreas Renschler, CEO of Volkswagen Truck & Bus and member of the Board of Management of Volkswagen AG responsible for commercial vehicles. “We are now taking the next step on our way to becoming a Global Champion in the commercial vehicles industry. The strategic alliance with Navistar is an important milestone and will be very beneficial for both sides.”
Navistar International Equity Analysis
Navistar International Corp (NYSE:NAV) trading today as $19.98 and is trading in the range of 19.25-23.45 today. Navistar International’s current market cap stands at $1.63 billion.
Navistar International is currently covered by 18 Wall Street analysts. The mean target price is $11.90 according to First Call. This presents a solid downside to the current price of the equity. The Mean Recommendation sits at 2.9 which is based on 2 Strong Buy, 2 Buy and 12 Hold ratings.
The most recent analyst actions consisted of Piper Jaffray downgrading the stock on June 28th.
The current quarter EPS consensus estimate is 0.15 with revenue estimates of 2.20B. Sales are expected to drop at a 13.30% rate. Navistar International reported actual earnings last quarter of 0.05 which beats the -0.16 consensus estimate, a 131.20% surprise.
Navistar International Corporation, through its subsidiaries, manufactures and sells commercial and military trucks, diesel engines, and school and commercial buses; and provides service parts for trucks and diesel engines worldwide. It operates through four segments: North America Truck, North America Parts, Global Operations, and Financial Services. The company manufactures and distributes Class 4 through 8 trucks and buses in the common carrier, private carrier, government, leasing, construction, energy/petroleum, military vehicle, and student and commercial transportation markets under the International and IC brands; and designs, engineers, and produces sheet metal components, including truck cabs. It also provides customers with proprietary products needed to support the International commercial and military truck, IC Bus, and MaxxForce engine lines, as well as other product lines; and a selection of other standard truck, trailer, and engine aftermarket parts. In addition, the company designs and manufactures diesel engines across the 50 through 550 horsepower range under the MaxxForce and MWM brand names; produces mid-range diesel engines primarily under contract manufacturing arrangements for sale to original equipment manufacturers in South America; and manufactures diesel engines for the pickup truck, van, and sport-utility vehicle markets. Further, it provides retail, wholesale, and lease financing of its trucks and parts, as well as financing for wholesale accounts and retail accounts receivable. The company markets its commercial products through an independent dealer network, as well as through distribution and service network retail outlets comprising 797 outlets in the United States and Canada, and 80 outlets in Mexico. Navistar International Corporation markets its reconditioned used trucks to owner-operators and fleet buyers through its network of used truck centers. The company was founded in 1902 and is headquartered in Lisle, Illinois.