Back to top

Analyst Blog

On Jan 23, we maintained our Outperform recommendation on Standard Motor Product Inc. (SMP - Analyst Report) based on its strong brand recognition, less cyclical end-market and efficient debt management measures.

Why Maintained?

Standard Motor’s adjusted earnings per share in the 2012-third quarter went up 23.7% year over year to 73 cents, surpassing the Zacks Consensus Estimate by 9 cents. Revenues increased 16.8% to $276.0 million, ahead of the Zacks Consensus Estimate of $258.0 million, driven by the positive impact from the company’s recent acquisitions and strong performance of the company’s Temperature Control segment. Over the past four quarters, Standard Motors has delivered an average surprise of 0.33%.

Following the release of the third quarter results, the Zacks Consensus Estimate for 2012 increased 7.9% to $1.77 per share. Moreover, the Zacks Consensus Estimate for 2013 also increased 6.3% to $2.03 per share. With the Zacks Consensus Estimates for both 2012 and 2013 going up, the company retains a Zacks Rank #1 (Strong Buy).

Standard Motor benefits from its strong brand recognition and wide customer base. With a focus on the aftermarket, the company is less exposed to the cyclical automotive industry. The company will benefit from the rising demand of repair products due to the improved used vehicles market, increase in the number of automobiles on the road and rise in the average age of vehicles in the U.S.

However, the company faces challenges from concentrated customer base. The company’s top five customers include Advance Auto Parts Inc. (AAP - Analyst Report) and O’Reilly Automotive Inc. (ORLY - Analyst Report). These companies account for more than 10% of the company’s revenues.

Other Stocks to Consider
 
Apart from Standard Motor, other stocks that are performing well in the industry where the company operates include Tesla Motors (TSLA - Analyst Report). It retains a Zacks Rank #2 (Buy).
 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
UNITED THER… UTHR 117.83 +28.51%
TRIQUINT SE… TQNT 20.67 +6.52%
VASCO DATA… VDSI 14.77 +4.68%
BANCO DO BR… BDORY 15.53 +3.95%
STRATTEC SE… STRT 80.24 +3.00%