Navistar Stock Surges After VW CEO Switch

Exec Change May Lead to Truck Unit Shakeup
Navistar Truck
Navistar's International RH day cab at 2017 NACV. (John Sommers II for Transport Topics)

Navistar International Corp. jumped the most this year after Volkswagen AG changed CEOs, a move that could portend further deal-making between the U.S. truck manufacturer and its second-biggest shareholder.

VW’s decision to replace CEO Matthias Mueller with Herbert Diess, the head of its namesake brand, may “signal that the board is open to further change,” including an initial public offering of the company’s truck and bus division, according to Gabelli & Co. analyst Brian Sponheimer.

An IPO “could culminate down the line in an eventual full purchase of Navistar,” Sponheimer said in an e-mail. He has a buy rating on the Lisle, Ill.-based company’s stock.

Navistar shares advanced as much as 8.6% on April 10, the biggest intraday gain since Dec. 19. Billionaire investor Carl Icahn and VW each hold about 17% stakes in the company, which limits the float, and significant short interest also contributes to the stock’s volatility, Sponheimer said.