Delphi Upgraded by Merrill on Lower Risk of Bankruptcy

Shares of Delphi Corp. advanced more than 4 percent after Merrill Lynch upgraded the auto parts maker to neutral from sell on the belief that the risk of bankruptcy has been reduced. Analyst John Casesa thinks the company may cut or eliminate its dividend following its board of directors meeting today, just as negotiations with the United Auto Workers union intensifies.

From AFX News Limited

NEW YORK — Shares of Delphi Corp. advanced more than 4 percent after Merrill Lynch upgraded the auto parts maker to neutral from sell on the belief that the risk of bankruptcy has been reduced.

Analyst John Casesa thinks the company may cut or eliminate its dividend following its board of directors meeting today, just as negotiations with the United Auto Workers union intensifies. Casesa also believe Delphi is close to naming a new chief executive, which he feels could boost confidence and accelerate restructuring.

The stock was last up 21 cents, or 4.1 percent, at $5.30, and has now gained 61 percent since the end of April. He said the company is still not out of the woods, however, as it remains highly dependent on General Motors and there is still concerns over accounting issues.

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