Daimler initiated with "outperform" - update

17.09.07 - Bear Stearns

LONDON, September 17 (newratings.com) - Analyst Daniel Cunliffe of Bear Stearns initiates coverage of Daimler (DAI) with an "outperform" rating. The target price is set to ?100.

In a research note published this morning, the analyst mentions that after the sale of Chrysler, Auto revenues have declined to 50% of total revenues, from 75%. The truck division is expected to drive 75% of Daimler?s earnings change in 2007-2009, the analyst says. While truck volumes are expected to rise by 11% in 2008-2009, truck margins are estimated at 12%, Bear Stearns adds. Daimler could repurchase 60% of its stock, valued at ?40 billion, with the buyback being funded through the sale of non-core assets, such as EADS, according to the analyst.