Ryan Brinkman, an analyst from J.P. Morgan, has initiated a new Buy rating on Garrett Motion (GTX).
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Ryan Brinkman has given his Buy rating due to a combination of factors highlighting Garrett Motion’s compelling growth potential, strong financial metrics, and market positioning. One key argument is the slower-than-anticipated shift to Battery Electric Vehicles (BEVs), which reduces the impact on Garrett Motion’s internal combustion engine (ICE) turbocharging business. This aligns with revised industry forecasts predicting a lower penetration of BEVs and increased production of ICE vehicles in Garrett’s key markets, which account for a significant portion of its revenues.
Additionally, Brinkman recognizes Garrett Motion’s capacity to drive sustainable growth through its innovative zero-emission vehicle (ZEV) offerings. With substantial investments in e-powertrains and hydrogen fuel cell compressors, these technologies are poised to support medium-term growth and long-term business resilience. Garrett’s robust EBITDA margins, superior free cash flow conversion rates, diversified end-markets, and strong market share gains add to the company’s appeal, reinforcing its position as a top-tier player in the auto parts sector. Combining these factors, Brinkman anticipates substantial upside to Garrett’s valuation, underpinned by a favorable outlook on earnings growth and shareholder-friendly capital allocation strategies.
In another report released yesterday, Stifel Nicolaus also maintained a Buy rating on the stock with a $21.00 price target.