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American Axle (AXL) to Deliver AWD PTUs for Ford Crossovers

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American Axle & Manufacturing Holdings, Inc. (AXL - Free Report) has signed a business contract with Ford Motor Company (F - Free Report) . Per the contract, American Axle will supply Power Transfer Units (PTU) for Ford’s crossover vehicles. American Axle’s all-wheel drive (AWD) PTUs will be initially used in 2019 Ford Edge and Lincoln Nautilus models.

With continued growth of crossover vehicle sales, customers are looking for options that are safe and fuel efficient. Per management, American Axle’s PTU will offer power with increased efficiency. Further, the association between the two companies will strengthen their relationship while supporting growth of crossover segment.

Placed on a vehicle's transmission, PTU is a major component of the Intelligent AWD of vehicles. The component assists the driver through difficult road conditions by monitoring traction using sensors. It stabilizes torque between the rear and front wheels to improve vehicle handling while maximizing traction to prevent skidding of wheels.

American Axle & Manufacturing Holdings, Inc. Price and Consensus

PTU is a component under American Axle’s EcoTrac Disconnecting AWD solutions. Other products offered under the line are multi-piece driveshafts, disconnecting PTUs, rear drive modules with electronic control units and torque transfer devices. In late 2013, American Axle introduced its first disconnecting AWD system and since then it has supplied more than 600,000 disconnecting AWD units.

American Axle supplies driveline systems and other components to various automakers and original equipment manufacturers. Additionally, the company is gaining businesses with its latest innovative driveline solution. It expects that this will support customer demand for advanced technologies, thus, leading to greater business diversification and growth.

Price Performance

In a month’s time, American Axle stock has moved up 11.4%, outperforming 2.3% increase of the industry it belongs to.

Zacks Rank & Stocks to Consider

Currently, both American Axle and Ford carry a Zacks Rank #3 (Hold). A few better-ranked stocks in the auto space are Toyota Motor Corporation (TM - Free Report) and Ferrari N.V. (RACE - Free Report) . Presently, Toyota sports a Zacks Rank #1 (Strong Buy) while Ferrari carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Toyota has an expected long-term growth rate of 5.7%. Shares of the company have risen 27.7% over the past year.

Ferrari has an expected long-term growth rate of 17.3%. Shares of the company have risen 57.7% over the past year.

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