There are several aspects of Navistar International's (NYSE:NAV) near-term future that must be clarified in order to give a better feel for the outlook of the company, and among them is the sustainability of their military revenue.
Barclays (NYSE:BCS) said, "The quarter offered limited visibility into the longer term share for the HD business, the incremental margin potential in this cycle, and the longer term sustainability of the Military revenues, which are key focus areas for the stock, but we believe that the upcoming analyst day on 1/25 could address some of those issues...Overall, we came away with the view that FY11 could be a back-end loaded year, which could remain an overhang for the stock. The back end load could be defined by three key factors: 1) the outlook for how the NAFTA truck market could ramp and how market share could trend, 2) the extent to which some of the cost headwinds that the business experienced in 4Q10 could persist in 1Q, and 3) the timing of some key components of the Military revenues."
Barclays reiterates an "Equalweight" on Navistar International, which last closed at $57.55, up $0.38, or 0.66 percent. Barclays has a price target on them of $53, raising it from $50.
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