Oshkosh Truck Corporation (OSK)

[Investorman]

Analyst Note: Oshkosh shares upgraded
September 16, 2009 2:51 PM ET

NEW YORK (AP) - An analyst upgraded shares of Oshkosh Corp. stock Wednesday, saying it trades at a discount and the company is set to cut its debt and continue getting big military contracts.

Longbow analyst Paul Bodnar upgraded the shares to "Buy" from "Neutral" and increased his fiscal 2010 earnings per share estimate to $3.20 from $2.76.

Analysts polled by Thomson Reuters expect, on average, $2.82.

"We view the shares of Oshkosh as undervalued for a firm with stable earnings over the next five years due to the defense business, ability to reduce leverage over the next few years and repay almost $1.3 billion in debt by the end of fiscal year 2011," he wrote in a client note.

Part of Bodnar's optimism about revenue comes from his expectation that the Oshkosh, Wis.-based company will profit from a U.S. troop buildup in Afghanistan.

He cited as an example Monday's Pentagon announcement that Oshkosh received a $189.1 million Army contract for additional mine-resistant, ambush-protected vehicles and related items.