GARRETT MOTION INC (+) : GTX Secures Third Major HVAC Partnership with Ingersoll Rand

研报英文原文证据摘录

GARRETT MOTION INC (+) : GTX Secures Third Major HVAC Partnership with Ingersoll Rand

Refinitiv

Investment case, valuation and risks

Garrett Motion Inc (Outperform, Target Price USD30)

Investment case

Garrett represents a near pure-play combustion engine name with top-tier financials,

outstanding capital returns, and the optionality to eventually expand into the EV &

industrial markets over time. This combination more than justifies its current valuation

- which runs toward the high-end of our covered auto suppliers - and in our view creates

a compelling entry point for a name which has remained overlooked as it lingered in

"bankruptcy purgatory" long after its underlying issues were resolved. We see GTX as

a company with strong profitability, FCF conversion, and a clear commitment to capital

returns supporting our Outperform rating.

Valuation methodology

We compare its "core" business to a group consisting of a weighted average of its peers

across end markets, including light vehicle and commercial vehicle, which currently

trades at 6.7x EV/EBITDA & 11.1x P/E on '27E. Additionally, we compare the discounted

value of GTX's 2035 genset turbo & HVAC EBITDA to a basket of industrial peers

including HVAC names, genset peers, and Accelleron, which builds large turbochargers

for applications including data centers and shipping, applying a modest discount.

Risks

To the upside:

Slower BEV adoption; ability to secure meaningful zero-emission awards; higher turbo

adoption in hybrid; EREV vehicles; decreased competition from other turbo suppliers

amid market consolidation.

To the downside:

Increased BEV adoption; failure to secure meaningful zero-emission awards; lower turbo

adoption in hybrid; EREV vehicles; increased competition from other turbo suppliers;

tariffs.