A top regional United Auto Workers official said Wednesday that a majority of workers at Volkswagen's massive Chattanooga factory have signed cards in favor of a German-style works council. Those cards, he added, are as legally binding as a more formal union vote — which regional GOP leaders have said will hurt their efforts to recruit more big employers.
Add another name to the list of people not at all upbeat about the prospects for shares of Delek US Holdings and its peers. Ben Brownlow at Raymond James has trimmed his price target for Brentwood-based Delek to $30 from $34. Delek (Ticker: DK), which peaked above $41 in the spring, has since slid all the way below $23. Similarly, Brownlow's peers at Deutsche see no improvement soon in the profitability of refiners, who have seen margins shrink as the gap between the prices of U.S. oil and the global Brent crude benchmark has narrowed.
[W]e hope for lower equity prices and 20%+ upside to our price targets before refining upgrades. We are not there yet. We are prepared to wait, as global oil markets have become weakened by super-high oil prices and demand may be too damaged to allow for a strong winter for refining.
Two local stocks have been downgraded by analysts in the past 24 hours. More prominently, Barclays Capital's Meredith Adler is voicing some concern about the outlook for Dollar General's margins, saying, "Investors have become too optimistic." Dollar General last week reported strong numbers but said its margins will slip later this year. Adler has lowered her rating to 'equalweight' from 'overweight' but kept her $58 price target — which leaves very little upside from the stock's (Ticker: DG) near-52-week-high levels.
Refining stocks have come way down from their highs of early this year but Jeff Dietert at Simmons & Co. sees more pain for owners of Delek US Holdings. Dietert has lowered his rating for the Brentwood-based parent of Mapco to 'underweight' from 'neutral.' Delek (Ticker: DK) is off about 7 percent so far this year but has given up more than 40 percent since March.
Moody's Investors Service has placed under review its opinion on the debt of Louisiana-Pacific following the news that the Nashville-based company plans to buy Ainsworth Lumber, the industry's No. 5 player, for more than $1 billion. As part of their review, Moody's analysts also will look into one of the things that has their equity brethren excited about the deal — how the planned consolidation might improve the prospects for rational supply growth and pricing.
You can almost hear the applause from investors and analysts... Let's see, you're buying a company that has higher margins than you, opens up global opportunities and lets you better supply the market while helping to keep a lid on capacity additions? Here's our stamp of approval.
The day after news of Louisiana-Pacific's deal to pay $1.1 billion for Canada's Ainsworth Lumber , shares of the downtown-based company (Ticker: LPX) are up more than 11 percent in afternoon trading to $17. Volume has been very heavy, with more than 14 million shares changing hands versus the daily average of 2.6 million.
Several analysts have contributed to the optimism. At D.A. Davidson, Steven Chercover raised his rating to 'buy' from 'neutral' and sees the stock climbing to $20, where it last traded in May. Mark Wilde at Deutsche has raised his target to $21 from $20 — and his rating to 'buy' from 'hold' — and says he sees a few more consolidations coming in an industry that ha regularly struggled with controlling its supply.
Nissan executives say August was their best retail sales month ever, with strong gains from both their car and truck divisions. The company's top three U.S. models — the Altima sedan, Sentra compact and Rogue crossover — posted growth of 24 percent, the same as the company overall. The electric Leaf and the (decidedly non-electric) Pathfinder put up the gaudiest year-over-year numbers. Here's the rundown.
Prominent local trucking company Western Express has taken Pilot Oil to court over the latter's fuel rebate program. Officials at Nashville-based Western Express say they were overcharged by as much as 9 cents per gallon over a period of eight years. The lawsuit — filed in Louisiana — also sheds some light on the semi-precarious finances of Western Express, which had 2010 revenues of more than $400 million and once upon a time filed papers to go public.
Western Express claims that it was forced to default on a loan covenant with its lenders, which required them to enter a consulting agreement with Knight Management Services Inc., and enter into a stock option investor rights agreement with Knight Capital Growth Inc., as well as “enter amendments and waivers to their credit facilities with JP Morgan Chase and Key Principal Partners.”
Knight Management Services and Knight Capital Growth are subsidiaries of Phoenix-based and publicy traded Knight Transportation, which runs a big terminal in Lebanon.