Canaccord Adams Maintains Fuel Systems (FSYS) Buy Rating, Raises Price Target

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03:22:12 pm on November 6, 2009

Canaccord Adams is also maintaining its Buy rating on Fuel Systems Solutions (FSYS) and raising the price target from $40 to $48 following yesterday’s earnings
Hat tip to for the following analyst comment:

“Incrementally positive. Delayed OEM (DOEM) momentum continues unabated (vehicle throughput +25% Q/Q), more than offsetting expected weakness in Industrial. The strength translated into higher guidance for the second consecutive quarter…The leverage in the model is clearly impressive, as DOEM volumes drove GM% and OM% up 290bps and 640bps Q/Q, respectively. Looking into Q1/10, DOEM visibility likely drives the continued financial outperformance, with volumes anticipated to stay strong, as Italy is widely expected to continue its cash for clunkers program in 2010. In addition, we find a healthy Teleflex contribution, early US vehicle fleet activity and heightened NAT GAS Act chatter and geographic diversification efforts within DOEM (Germany, Poland, etc.) keeping our fundamental outlook positive moving into the new year.  We maintain our BUY rating while raising our price target to $48 from $40. Our 2009 estimates go to $423.6M/$2.37 from $378.4M/$1.65, while our 2010 estimates get upwardly revised to$475.0M/$2.70 from $438M/$1.90. Importantly, we do assume an extension of the Italian cash for clunkers scheme in 2010 at similar terms, an expectation that needs to be confirmed moving into early 2010.”

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