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American Axle & Manufacturing (AXL) Gains As Market Dips: What You Should Know

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American Axle & Manufacturing (AXL - Free Report) closed at $12.42 in the latest trading session, marking a +0.73% move from the prior day. This change outpaced the S&P 500's 0.08% loss on the day.

Heading into today, shares of the maker of auto parts had gained 17.65% over the past month, outpacing the Auto-Tires-Trucks sector's gain of 3.91% and the S&P 500's gain of 1.68% in that time.

AXL will be looking to display strength as it nears its next earnings release. In that report, analysts expect AXL to post earnings of $0.06 per share. This would mark year-over-year growth of 103.35%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.24 billion, up 140.44% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $1.48 per share and revenue of $5.53 billion, which would represent changes of +957.14% and +17.46%, respectively, from the prior year.

Any recent changes to analyst estimates for AXL should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 20.79% higher. AXL currently has a Zacks Rank of #1 (Strong Buy).

In terms of valuation, AXL is currently trading at a Forward P/E ratio of 8.35. Its industry sports an average Forward P/E of 14.86, so we one might conclude that AXL is trading at a discount comparatively.

We can also see that AXL currently has a PEG ratio of 1.04. 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. The Automotive - Original Equipment was holding an average PEG ratio of 1.1 at yesterday's closing price.

The Automotive - Original Equipment industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 177, which puts it in the bottom 31% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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