Free Issue No. 11 of 21.05.2020
Our recommendation of 23 April 2020 was made almost at the all-time low in the range of USD 3.50 to USD 3.75. And already around two weeks later, the price in day-to-day trading was a "proud" USD 6.50 to USD 6.80... a short-term, book performance of around 75%. But hardly anyone was able to "lock in" the profit in such a short, timely perfection.
On 11 May, the figures for the first quarter of 2020 were released. It was not within the scope of expectations that the automotive technology company GARRETT MOTION would bring significantly better figures in the short term in the environment of the corona factors; only a few manage this. All in all, one can be very satisfied with the data set, the outlook and the corona-related measures. Quarterly sales were "only" down -8.5% to USD 745m. Operating income fell to USD 108m,which corresponds to an EBITDA margin of +14.5% compared to +19% in Q1 2019. Net income decreased from USD 73m to USD 52m.It should be noted that net debt was reduced by USD 162m y-o-y to USD 1.23bn still. Liquidity is good and the company is strictly implementing its priorities.These include increased financial flexibility, operational continuity, cost control and, in the important development area, pushing forward with future technologies (e-mobility, hybrid, fuel cells). Clear rules have also been installed with regard to employee health.Furthermore, capacities in China have been fully ramped up again, while Japan and South Korea are also operating at normal capacity.North America and Europe are currently making the transition from "slowdown" to "slowup". Due to the somewhat declining quarterly figures, the share price range above USD 5 could not be maintained.
Our price target is USD 10!
GARRETT MOTION is listed on the NYSE in New York under the symbol GTX, the security number is 43'586'030, last price approx. CHF 5.10.BUY/R4/GP +96%
