RW Baird upgraded Dura Automotive (DRRA) to strong buy from market outperform.
Analyst David Leiker says better than expected forward guidance reduces the risk of the company tripping up its debt covenants. He upgraded on the belief that the stock will be "revalued" to include a balance sheet discount of 5.3 times the 2002 EBITDA vs. the group average of 5.9 times. He says he believes the discount will decline as it become evident Dura will stay in compliance with its covenants. Leiker notes Dura reduced its net debt in 2001, and should continue to do so in 2002. He upped the 2002 earnings per share estimate by $0.15 to $2.65 (above guidance), and raised the 2003 estimate by $0.10 to $3.35. Leiker says his $28 target could exceed $30 by yearend.