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Magna (MGA) Dips More Than Broader Markets: What You Should Know

·3 min read

Magna (MGA) closed at $81.03 in the latest trading session, marking a -0.86% move from the prior day. This move lagged the S&P 500's daily loss of 0.47%.

Coming into today, shares of the automotive supply company had lost 11.93% in the past month. In that same time, the Auto-Tires-Trucks sector lost 4.17%, while the S&P 500 gained 3.38%.

MGA will be looking to display strength as it nears its next earnings release, which is expected to be August 6, 2021. The company is expected to report EPS of $1.44, up 184.21% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.37 billion, up 118.15% from the year-ago period.

MGA's full-year Zacks Consensus Estimates are calling for earnings of $7.48 per share and revenue of $40.76 billion. These results would represent year-over-year changes of +89.37% and +24.84%, respectively.

Investors might also notice recent changes to analyst estimates for MGA. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.19% lower. MGA is currently a Zacks Rank #3 (Hold).

Looking at its valuation, MGA is holding a Forward P/E ratio of 10.93. This represents a discount compared to its industry's average Forward P/E of 12.46.

Meanwhile, MGA's PEG ratio is currently 0.56. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Automotive - Original Equipment industry currently had an average PEG ratio of 0.86 as of yesterday's close.

The Automotive - Original Equipment industry is part of the Auto-Tires-Trucks sector. This industry currently has a Zacks Industry Rank of 179, which puts it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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