Zacks Investment Research downgraded shares of Standard Motor Products Inc. (SMP) from OUTPERFORM to NEUTRAL on September 30, 2013, with a target price of $34.00.
Standard Motor enjoys strong brand recognition and benefits from a less cyclical end-market within the auto and auto parts industry. Furthermore, the acquisitions of BLD, Forecast Trading and Compressor Works will continue to generate savings through optimization of product costs and operating expenses. However, we are concerned about Standard Motor's high dependence on some customers and price competition prevailing in the market. In the second quarter of 2013, the company posted 18.6% rise in adjusted earnings per share to $0.70, but missed the Zacks Consensus Estimate of $0.76. Total revenue increased 0.5% to $270.1 million, lagging the Zacks Consensus Estimate of $283 million. Thus, we downgrade our recommendation on Standard Motor's stock to Neutral from Outperform.
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