HOG - Cooper-Standard Holdings: Leaner Company Could Allow It To Combat Inflation And Recover Profitability
- The company suffered from various headwinds since 2018 from the trade war with China to the COVID pandemic.
- The company has been closing unprofitable plants and rightsizing. The company of today is leaner than in 2018.
- Management is combating inflation by indexing contracts. So far 20-25% of contracts have been indexed.
- It has more cash on its balance sheet than required for daily operation. That combined with the cash generation in the coming years will allow them to delever.
- My target price is $70 with a downside case of $10. At the current stock price, it is a very attractive risk-reward profile.
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Cooper-Standard Holdings: Leaner Company Could Allow It To Combat Inflation And Recover Profitability