S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Latest freight railroad layoffs and Wall Street pressure renew concerns about safety and service
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
How major US stock indexes fared Friday, 3/1/2024
Brazil's economy grows 2.9% in Lula's 1st year, beating expectations
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Question of whether Nebraska public money can go to private schools still set for November ballot
A US appeals court ruling could allow mine development on Oak Flat, land sacred to Apaches
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Georgia's largest county is still repairing damage from January cyberattack
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Latest freight railroad layoffs and Wall Street pressure renew concerns about safety and service
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
How major US stock indexes fared Friday, 3/1/2024
Brazil's economy grows 2.9% in Lula's 1st year, beating expectations
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Question of whether Nebraska public money can go to private schools still set for November ballot
A US appeals court ruling could allow mine development on Oak Flat, land sacred to Apaches
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Georgia's largest county is still repairing damage from January cyberattack
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Latest freight railroad layoffs and Wall Street pressure renew concerns about safety and service
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
How major US stock indexes fared Friday, 3/1/2024
Brazil's economy grows 2.9% in Lula's 1st year, beating expectations
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Question of whether Nebraska public money can go to private schools still set for November ballot
A US appeals court ruling could allow mine development on Oak Flat, land sacred to Apaches
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Georgia's largest county is still repairing damage from January cyberattack
S&P 500   5,137.08
DOW   39,087.38
QQQ   445.61
Latest freight railroad layoffs and Wall Street pressure renew concerns about safety and service
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
How major US stock indexes fared Friday, 3/1/2024
Brazil's economy grows 2.9% in Lula's 1st year, beating expectations
This is the #1 Stock to Buy for the AI Tidal Wave (Ad)
Question of whether Nebraska public money can go to private schools still set for November ballot
A US appeals court ruling could allow mine development on Oak Flat, land sacred to Apaches
Critical asset just had biggest fall on record (Ad)
Peace, music and memories: As the 1960s fade, historians scramble to capture Woodstock's voices
Georgia's largest county is still repairing damage from January cyberattack

Magna International is Your Auto and EV One-Stop Shop Stock

Key Points

  • Magna produces auto parts and systems to the 50 largest automobile brands worldwide
  • Magna will begin production of its Fisker’s EVs in November
  • Russia and a strong US dollar took a large bite out of Q2 2022 earnings
  • The Company sees a second-half 2022 rebound from semiconductor supply and China stimulus
  • 5 stocks we like better than Magna International

Magna International is Your Auto and EV One-Stop Shop Stock Worldwide vehicle parts manufacturer Magna International NYSE: MGA is not a household name yet is the largest automotive supplier in North America and fourth largest in the world. The Company is contracted with over 50 global customers including the largest automotive brands in the world like Ford NYSE: F and General Motors NYSE: GM as well as major European players like Volkswagen OTCMKTS: VWAGY and BMW. The Company manufactures everything from doors, seats, legacy and electric powertrains, and transmissions to manufacturing complete automobiles. Magna is a one-stop shop and the largest contract manufacturer for automobiles in the world with annual production capacity of over 200,000 vehicles.

Riding the Automotive Megatrends

They are on the cutting edge of trends in the automotive industry like electrification, electric vehicles (EVs), energy storage systems, autonomous driving, mobility, and connectivity. While most of their nearly $39 billion of sales comes from legacy automobile business, it’s positioned to benefit from megatrends in the auto industry. The original Tesla NASDAQ: TSLA killer,  Fisker NYSE: FSR will start production of its highly anticipated EVs in November. Magna is handling the complete manufacturing of the EVs. While they face the continuous headwinds of supply chain constraints, inflationary cost pressures, and a strong U.S. dollar, they are also reaping the tailwinds of strong auto demand and low dealer inventory levels. The stock is a one-stop shop for investors seeking a diversified major player riding the megatrends in the auto industry.

Magna International is Your Auto and EV One-Stop Shop Stock

Attractive Pullback Levels

Using the rifle charts on the weekly and daily time frames provide a comprehensive view of the price for MGA stock. The weekly rifle chart breakdown triggered on the rejection of the breakout attempt at the $65.24 Fibonacci (fib) level. The weekly downtrend has a falling 5-period moving average (MA) resistance at $53.39 followed by the weekly 15-period MA resistance falling at $57.69 as the weekly stochastic falls to the 20-band. The stock failed three separate attempts to stay above the weekly market structure low (MSL) buy trigger at $62.99 causing shares to plummet towards the weekly lower Bollinger Bands (BBs) at $46.55.  The daily rifle chart has been in a downtrend led by the falling 5-period MA resistance at $49.54 followed by the 15-period MA at $53.18. The daily lower BBs sit at $45.35. The daily stochastic has crossed up but is stalling at the 10-band. It needs to crack the 20-band to gain upside momentum. Attractive pullback levels remain at the $46.26, $44.25 fib, $41.99 fib, $38.32 fib, $34.65 fib, and the $31.02 fib.


Second Half 2022 Recovery

On July 29, 2021, Magna released its fiscal second-quarter 2022 results for the quarter ending June 2022. The Company reported an earnings-per-share (EPS) profit of $0.83 excluding non-recurring items versus consensus analyst estimates for $0.92, a (-$0.09) beat. Revenues rose 3.6% year-over-year (YoY) to $9.36 billion beating analyst estimates for $8.92 billion. The Company saw a 2% rise in light vehicle production, largely driven by a 14% jump in sales in North America. FX translations took a (-$629 million) bite out of earnings as well as lower sales in Russia. Higher input costs, Russia, and operating inefficiencies in Europe resulted in a (-41%) YoY drop in adjusted EPS from $1.40 to $0.83 and diluted EPS of (-$0.54) versus $1.40 in the year ago period. This was affected by a (-$1.24) non-cash impairment charge on its investment in Russia. However, the Company is optimistic for a second-half recovery. Magna raised its full-year 2022 revenues to come in between $37.6 billion to $39.2 billion, up from prior guidance of $37.2 billion to $38.9 billion versus $37.75 billion consensus analyst estimates.

Looming Headwinds

Magna CEO, Swamy Kotagiri expects supply chain problems to continue through 2022. These include semiconductor shortages to parts manufactured in China with COVID lockdowns. Input costs were and will remain elevated. He did remind analysts, “The stronger US dollar relative to other currencies, in which we operate, particularly the euro, is negatively impacting our reported results, and there is some risk going forward that high inflation and rising rates will impact auto consumers.”

Strong Tailwinds

The Company is experiencing strong auto demand with low dealer inventories and tight supply. Semiconductor supply constraints are expected to ease in the second half of 2022. The easing of China COVID lockdowns in addition to a government economic stimulus package should improve supply chains and bolster auto demand.

 

→ Critical asset just had biggest fall on record (From Stansberry Research) (Ad)

Should you invest $1,000 in Magna International right now?

Before you consider Magna International, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Magna International wasn't on the list.

While Magna International currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The Five Stocks Here

10 Best Stocks to Own in 2024 Cover

Click the link below and we'll send you MarketBeat's list of the 10 best stocks to own in 2024 and why they should be in your portfolio.

Get This Free Report

Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Magna International (MGA)
4.5871 of 5 stars
$54.05-1.9%3.52%12.81Hold$63.93
Ford Motor (F)
4.6943 of 5 stars
$12.45+0.1%4.82%11.53Hold$13.81
General Motors (GM)
4.6742 of 5 stars
$40.99+0.0%1.17%5.61Moderate Buy$50.66
Volkswagen (VWAGY)
0 of 5 stars
$15.10-3.8%4.30%N/AHoldN/A
Fisker (FSR)
2.6647 of 5 stars
$0.48-33.7%N/A-0.22Reduce$2.76
Tesla (TSLA)
4.3951 of 5 stars
$202.64+0.4%N/A47.02Hold$219.89
Compare These Stocks  Add These Stocks to My Watchlist 

Jea Yu

About Jea Yu

  • JeaYu21@gmail.com

Contributing Author

Trading Strategies

Experience

Jea Yu has been a contributing writer for MarketBeat since 2018.

Areas of Expertise

Equities, options, ETFs and futures; fundamental, qualitative, quantitative and technical analysis and pattern identification; active and swing trading; trading systems and methodology development

Education

Bachelor of Arts, University of Maryland, College Park

Past Experience

U.S. equity markets trader, writer and analyst for over 25 years. Published four books by publishers McGraw-Hill, John Wiley & Sons, Marketplace Books and Bloomberg Press. Speaker at various expos and seminars and has been quoted and featured in USA Today, The Wall Street Journal, Traders Magazine, The Financial Times and various trade publications, including Stocks & Commodities, Active Trader and Online Investor.


Featured Articles and Offers

The Tesla Earnings Story That's NOT Being Told

The Tesla Earnings Story That's NOT Being Told

If the last year of price cuts and sluggish sales weren’t enough to tip off the market to the fact the EV bubble has burst, Tesla’s NASDAQ: TSLA Q4 results and outlook for 2024 should do it.

Search Headlines: