Magna International (NYSE:MGA) Lowered to “Strong Sell” at Zacks Investment Research

Zacks Investment Research downgraded shares of Magna International (NYSE:MGA) (TSE:MG) from a hold rating to a strong sell rating in a research note issued to investors on Monday morning, Zacks.com reports. The brokerage currently has $71.00 target price on the stock.

According to Zacks, “Magna is battling the global shortage of semiconductor supply which is currently prevalent in the auto sector. Consequently, Magna has lowered 2021 light vehicle production (LVP) forecasts for North America and Europe by 1.2 million and 400,000 units, respectively. Trimmed 2021 earnings and sales outlook have dampened investors’ faith in the stock. It now expects full-year 2021 revenues in the band of $38-$39.5 billion, down from the previous view of $40.2-$41.8 billion. Soaring costs of commodities like resin and steel and rising labor and launch costs have increased manufacturing costs of the company. Further, Magna is set to invest heavily in order to develop technologically advanced products. Resultantly, Magna’s margins are under pressure. As such, the stock warrants a bearish stance right now.”

MGA has been the subject of several other reports. Wells Fargo & Company reduced their price objective on Magna International from $88.00 to $84.00 and set an equal weight rating for the company in a research report on Tuesday, October 5th. Credit Suisse Group reduced their price objective on Magna International from $122.00 to $115.00 and set an outperform rating for the company in a research report on Wednesday, August 11th. Barclays cut Magna International from an overweight rating to an equal weight rating and reduced their price objective for the company from $110.00 to $87.00 in a research report on Monday. The Goldman Sachs Group reduced their price objective on Magna International from $105.00 to $102.00 and set a buy rating for the company in a research report on Sunday, September 26th. Finally, Raymond James restated a market perform rating and issued a $92.00 target price on shares of Magna International in a research note on Monday, August 9th. One equities research analyst has rated the stock with a sell rating, four have assigned a hold rating and ten have given a buy rating to the company. According to MarketBeat.com, Magna International has a consensus rating of Buy and a consensus target price of $88.87.

Shares of Magna International stock opened at $84.27 on Monday. The stock has a market capitalization of $25.34 billion, a P/E ratio of 11.66, a PEG ratio of 0.56 and a beta of 1.54. The company has a quick ratio of 1.04, a current ratio of 1.44 and a debt-to-equity ratio of 0.32. The stock has a 50 day moving average price of $80.04 and a two-hundred day moving average price of $88.28. Magna International has a 12-month low of $49.24 and a 12-month high of $104.28.

Magna International (NYSE:MGA) (TSE:MG) last announced its earnings results on Friday, August 6th. The company reported $1.40 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $1.44 by ($0.04). Magna International had a return on equity of 20.83% and a net margin of 5.61%. The company had revenue of $9.03 billion for the quarter, compared to the consensus estimate of $9.28 billion. During the same period in the previous year, the company earned ($1.71) EPS. The firm’s revenue for the quarter was up 110.4% compared to the same quarter last year. Sell-side analysts anticipate that Magna International will post 7.24 earnings per share for the current year.

The business also recently disclosed a quarterly dividend, which was paid on Friday, September 3rd. Shareholders of record on Friday, August 20th were paid a dividend of $0.43 per share. The ex-dividend date of this dividend was Thursday, August 19th. This represents a $1.72 annualized dividend and a yield of 2.04%. Magna International’s dividend payout ratio is currently 43.54%.

A number of institutional investors have recently added to or reduced their stakes in the business. Johnson Investment Counsel Inc. raised its stake in Magna International by 1.7% during the second quarter. Johnson Investment Counsel Inc. now owns 8,645 shares of the company’s stock worth $801,000 after acquiring an additional 145 shares in the last quarter. Harvest Fund Management Co. Ltd raised its stake in Magna International by 71.5% during the first quarter. Harvest Fund Management Co. Ltd now owns 446 shares of the company’s stock worth $39,000 after acquiring an additional 186 shares in the last quarter. Banco Bilbao Vizcaya Argentaria S.A. raised its stake in Magna International by 1.0% during the first quarter. Banco Bilbao Vizcaya Argentaria S.A. now owns 26,028 shares of the company’s stock worth $2,292,000 after acquiring an additional 263 shares in the last quarter. Van ECK Associates Corp acquired a new position in Magna International during the first quarter worth $30,000. Finally, FDx Advisors Inc. raised its stake in Magna International by 13.8% during the second quarter. FDx Advisors Inc. now owns 3,380 shares of the company’s stock worth $313,000 after acquiring an additional 409 shares in the last quarter. Hedge funds and other institutional investors own 59.14% of the company’s stock.

Magna International Company Profile

Magna International, Inc is a mobility technology company, which supplies to the automotive industry. It operates through the following segments: Body Exteriors and Structures, Power and Vision, Seating Systems, and Complete Vehicles. The Body Exteriors and Structures segment includes body and chassis systems, exterior systems and roof systems operations.

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