Morgan Stanley Lifts Magna International’s Target Price to $96, Upgrades to Equal-weight

Morgan Stanley raised their stock price forecast on Magna International to $96 from $61 and upgraded the mobility technology company’s stock to an “Equal-weight” rating.

“We upgrade Magna International (MGA) to Equal-weight from Underweight as we have greater confidence that management’s strategy can drive higher share/content on high growth BEV platforms. We double our revenue CAGR to 4% and raise our price target to $96,” noted Adam Jonas, equity analyst at Morgan Stanley.

“Raised exit EBITDA margin forecast to 8.9% vs. 8.2% previously as our higher growth drives operating leverage, primarily in the BEV-exposed businesses (BEV Power & Vision, Body & Exterior, Complete Seating and Complete BEV vehicle assembly). This change adds approximately $5 to our price target.”

The company is set to announce its next earnings report on Thursday, May 6. According to ZACKS Research, Magna International is expected to post $9.75 billion in sales for the current fiscal quarter.

The U.S. listed Magna International’s shares, which surged over 25% in 2020, rose 4.6% to $93.64 on Monday.

Eleven analysts who offered stock ratings for Magna International in the last three months forecast the average price in 12 months at $92.18 with a high forecast of $100.00 and a low forecast of $61.00.

The average price target represents a -1.56% decrease from the last price of $93.64. Of those 11 equity analysts, seven rated “Buy”, three rated “Hold” and one rated “Sell”, according to Tipranks.

Morgan Stanley gave the bull-case scenario target price of $135 and the worst-case scenario forecast of $55.

“MGA is the third-largest global auto supplier, with leadership in many product segments, strong balance sheet, and attractive valuation vs. peers. We believe Magna has an ability to grow its EV and AV-related business lines in a way that can more than compensate for the run-out of ICE/legacy OEM product lines,” Morgan Stanley’s Jonas added.

“The net result is modest growth over market, balanced by a starting point of peak cycle and margins. We see the stock as largely fairly valued with a mostly even risk-reward skew.”

Other equity analysts also recently updated their stock outlook. Magna International had its price target upped by KeyCorp to $98 from $86. They currently have an overweight rating on the stock. Barclays upped their target price to $87 from $75 and gave the company an equal weight rating.

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