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Magna (MGA) Gains From Technology Development, Alliances


On May 16, we issued an updated research report on Magna International Inc. MGA.

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, Oshkosh Corporation OSK and Ferrari N.V. RACE. 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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