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American Axle & Manufacturing (AXL) Gains But Lags Market: What You Should Know

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In the latest trading session, American Axle & Manufacturing (AXL - Free Report) closed at $9.61, marking a +1.37% move from the previous day. This move lagged the S&P 500's daily gain of 1.66%. At the same time, the Dow added 1.39%, and the tech-heavy Nasdaq gained 1.24%.

Heading into today, shares of the maker of auto parts had lost 4.34% over the past month, lagging the Auto-Tires-Trucks sector's loss of 2.86% and the S&P 500's gain of 1.91% in that time.

Wall Street will be looking for positivity from AXL as it approaches its next earnings report date. The company is expected to report EPS of $0.26, up 30% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $1.35 billion, up 0.26% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $1.34 per share and revenue of $5.52 billion. These totals would mark changes of +857.14% and +17.16%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for AXL. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 11.09% higher. AXL is currently sporting a Zacks Rank of #3 (Hold).

In terms of valuation, AXL is currently trading at a Forward P/E ratio of 7.06. Its industry sports an average Forward P/E of 15.54, so we one might conclude that AXL is trading at a discount comparatively.

Meanwhile, AXL's PEG ratio is currently 0.88. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AXL's industry had an average PEG ratio of 1.4 as of yesterday's close.

The Automotive - Original Equipment industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 108, which puts it in the top 43% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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