Tuesday saw Cooper-Standard Holdings Inc. (NYSE:CPS) receive a positive adjustment from Freedom Capital Markets, with the firm upgrading the stock from Hold to Buy and setting a new price target of $22.00. The upgrade comes in the wake of the company's recent performance and market position as a leading supplier within the automotive industry.
According to the analyst from Freedom Capital Markets, Cooper-Standard's standing as the number one global supplier of sealing products, along with its rank as the second and third in fuel and brake delivery and fluid transfer products respectively, positions the company favorably within the global auto industry. The firm's EBITDA margins, which peaked in 2017 at 12.5% and then plummeted to 0.6% in 2021, have been on a recovery trajectory. The analyst projects this upward trend in margins to persist through 2024 and 2025.
The decision to upgrade the stock rating follows a significant 25% drop in Cooper-Standard's share price subsequent to the release of their fourth quarter earnings. This decline is perceived by Freedom Capital Markets as an opportunity for investors to purchase shares at a lower price.
The analyst's statement highlighted the recent improvements in the company's EBITDA margins as a key reason for the optimistic outlook. The expectation is that Cooper-Standard will continue to experience gains in the coming years, which contributed to the decision to raise the stock's rating and price target.
The new price target of $22.00 represents a notable increase from the stock's current trading price, reflecting Freedom Capital Markets' confidence in Cooper-Standard's potential for growth and profitability in the near future.
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