Merrill Lynch gives Delek Automotive Systems Ltd. (TASE: DLEA) a "Buy" recommendation, and raised its target price to NIS 63 from NIS 60, after noting that the company's third quarter results beat the investment bank's forecasts.
Merrill Lynch says, "The main reasons for the improvement were the change in overall sales mix (Mazda accounted for 68% of sales in the quarter versus 60% in the corresponding quarter of 2006) and strong demand for cars, which allowed for a better pricing scale. This trend will continue in the fourth quarter."
The investment bank says that the fourth quarter, not the third quarter "will be the driver for Delek Auto, with the launch of six new models, including blockbusters Mazda 2 and Mazda 6. Since end-September, the company has sold 2,500 of the new models, which will be reflected in the fourth quarter numbers. We are increasing our 2007-08 revenue projections to NIS 4.39 billion and NIS 4.96 billion, respectively (4% each year), and our EBITDA forecasts for the same years by 9% to NIS 598 million and NIS 642 million.
Published by Globes [online], Israel business news - www.globes-online.com - on November 18, 2007
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