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Magna (MGA) Gains From Technology Development, Alliances

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On May 16, we issued an updated research report on Magna International Inc. (MGA - Free Report) .

The company is focusing on innovative technology development by program launches across its business segments and through business collaborations. In April, Magna partnered with BAIC Group to co-develop next-generation electric-vehicle (EV) architecture for the Chinese market. In March, the company teamed up with Lyft, a growing rideshare company, to finance, build up and manufacture self-driving systems. These initiatives will help the company to broaden and strengthen its product portfolio.

It also follows an active capital deployment to boost shareholder value. The company announced a dividend of 33 cents per share for first-quarter 2018. Additionally, during the reported quarter, Magna repurchased 1.9 million shares for $103 million.

Magna International Inc. Price and Consensus

 

This leading manufacturer and supplier of automotive components witnessed a year-over-year increase in revenues and adjusted earnings in first-quarter 2018. Moreover, both adjusted earnings and revenues surpassed the Zacks Consensus Estimate.

Magna has also raised its guidance for full-year 2018. Total sales are anticipated to be $40.9-$43.1 billion compared with the prior expectation of $39.3-$41.5 billion. Further, it expects light-vehicle production in North America to be approximately 17.3 million units, a turn down from the previous anticipation of 17.4 million. The figure is expected to be 22.6 million units for Europe against the prior expectation of 22.3-22.4 million.

Moreover, the stock has seen the Zacks Consensus Estimate for annual earnings being revised 4.2% upward over the last seven days.

Price Performance

Over a month, Magna’s stock has moved up 10.6%, outperforming 0.6% decline of the industry it belongs to.

 

Zacks Rank & Other Stocks to Consider

Magna currently carries a Zacks Rank #2 (Buy). Other top-ranked stocks in the auto space are General Motors Company (GM - Free Report) , Oshkosh Corporation (OSK - Free Report) and Ferrari N.V. (RACE - Free Report) . General Motors carries a Zacks Rank #2 while Oshkosh and Ferrari sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

General Motors has an expected long-term growth rate of 5.5%. Shares of the company have risen 17.1% over the past year.

Oshkosh has an expected long-term growth rate of 18.3%. In a year’s time, shares of the company have gained 21%.

Ferrari has an expected long-term growth rate of 17.3%. Shares of the company have risen 58.9% over the past year.

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