WASHINGTON (AP) — Methode Electronics Inc. shares soared Friday after Robert W. Baird upgraded the stock to “Outperform” from “Neutral,” saying a business model transformation could drive the stock close to $20 over the next several years.
Methode’s shares were up $1.69, or 18.7 percent, at $10.74 by midday. They earlier traded at a new year high of $10.81, eclipsing a previous peak of $9.75 set in September.
In a research note, Baird analyst David Leiker said Methode Electronics has exited low-margin businesses, consolidated manufacturing operations and shifted development efforts toward highly engineered systems and products, most notably the MyFord Touch. The MyFord Touch is a liquid crystal display dashboard for cars that would let users do things such as personalize a car’s audio and temperature settings.
Ford Motor Co. plans to introduce the system later this year and wants to have it in 80 percent of its vehicles in the next five years.
“We believe the MyFord Touch product represents a new secular growth opportunity and exemplifies company’s new product strategy to provide engineered solutions that feature numerous technologies,” Leiker write in a note to clients.
Chicago-based Methode Electronics makes electro-mechanical devices for automobiles, computers and networking equipment, consumer electronics and appliances, industrial equipment and other products. The company’s systems use electrical, electronic, wireless, radio remote control, sensing and optical technologies to send signals through sensors, interconnections and controls.