GAAP Tax Weighs on ArvinMeritor (NYSE:ARM)

According to Barclays (NYSE:BCS), investor concerns about the GAAP tax rate on ArvinMeritor (NYSE:ARM) is unwarranted, and shouldn't have any impact on cash taxes.

Barclays said, "ARM management presented a solid view of the company's prospects but investors appear overly concerned with cautious guidance and GAAP taxes: The ARM investor day highlighted, in our view, a strong management team and a strong product line well-positioned in key commercial truck markets. Despite some initial disappointment, we believe 1) the guidance was based on very conservative build assumptions, and 2) the tax rate is a GAAP tax rate has no impact on cash taxes."

Barclays maintains an "Overweight" rating on ArvinMeritor, which closed Friday at $20.10, up $0.16, or 0.80 percent. They raised their price target on them from $17 to $25.