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Evercore ISI downgraded Magna International (NYSE:MGA) on Monday to an In Line rating after having the auto supplier set at Outperform. The firm said the downgrade was driven by headwinds from Fisker’s (OTC:FSRN) soft performance. Those headwinds included both the warranty ownership held by Magna in Fisker (OTC:FSRN) and lower than anticipated Steyr volume.
Analyst Chris McNally said investors should expect the difficult story for Magna (MGA) to continue for the first half of the year due to Steyr stumbles and earnings hits from Fisker (OTC:FSRN). While McNally sees some upside potential that Q1 EPS tops the consensus mark, he sees large headline risk around comments that could be made about the Fisker (OTC:FSRN) business. “Until the FSR risk clears, MGA is likely a tactical underperform ahead before a 2H turnaround,” he warned.
Evercore ISI assigned a price target of $62 to MGA, which represents a multiple of 8X the 2025 EPS estimate.
Seeking Alpha Investing Group Leader Trapping Value thinks the MGA share price weakeness could represent a good entry point for long-term investors.
Shares of Magna International (MGA) fell 1.57% in premarket trading on Monday to $49.06 vs. the 52-week trading range of $46.71 to $65.27. The Seeking Alpha Quant Rating on MGA is Hold. The dividend yield for new buyers of the stock is 3.81%.
As for Fisker (OTC:FSRN), the company disclosed last week that it was withdrawing its previously issued guidance for the year 2024. The EV maker added that it was continuing to evaluate strategic alternatives and would forego providing any updated guidance during the process. The stock was delisted by the New York Stock Exchange in late March.