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

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Zacks Equity Research
·3 min read
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Magna (MGA) closed the most recent trading day at $76.39, moving -0.59% from the previous trading session. This change lagged the S&P 500's 0.04% loss on the day. Meanwhile, the Dow gained 0.2%, and the Nasdaq, a tech-heavy index, lost 0.25%.

Coming into today, shares of the automotive supply company had gained 3.31% in the past month. In that same time, the Auto-Tires-Trucks sector gained 2.37%, while the S&P 500 gained 2.37%.

MGA will be looking to display strength as it nears its next earnings release, which is expected to be February 19, 2021. In that report, analysts expect MGA to post earnings of $1.98 per share. This would mark year-over-year growth of 40.43%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $9.92 billion, up 5.62% from the year-ago period.

Any recent changes to analyst estimates for MGA should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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. Within the past 30 days, our consensus EPS projection has moved 3.26% higher. MGA is holding a Zacks Rank of #1 (Strong Buy) right now.

In terms of valuation, MGA is currently trading at a Forward P/E ratio of 12.81. This valuation marks a discount compared to its industry's average Forward P/E of 17.4.

It is also worth noting that MGA currently has a PEG ratio of 2.39. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Automotive - Original Equipment industry currently had an average PEG ratio of 1.29 as of yesterday's close.

The Automotive - Original Equipment industry is part of the Auto-Tires-Trucks sector. This group has a Zacks Industry Rank of 48, putting it in the top 19% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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