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Magna (MGA) Outpaces Stock Market Gains: What You Should Know

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Zacks Equity Research
·3 min read
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In the latest trading session, Magna (MGA) closed at $95.75, marking a +1.92% move from the previous day. This move outpaced the S&P 500's daily gain of 1.11%.

Prior to today's trading, shares of the automotive supply company had gained 3.04% over the past month. This has outpaced the Auto-Tires-Trucks sector's loss of 0.46% and lagged the S&P 500's gain of 4.72% in that time.

Wall Street will be looking for positivity from MGA as it approaches its next earnings report date. On that day, MGA is projected to report earnings of $1.63 per share, which would represent year-over-year growth of 89.53%. Meanwhile, our latest consensus estimate is calling for revenue of $9.75 billion, up 12.57% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.42 per share and revenue of $40.8 billion, which would represent changes of +87.85% and +24.97%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for MGA. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. MGA currently has a Zacks Rank of #1 (Strong Buy).

In terms of valuation, MGA is currently trading at a Forward P/E ratio of 12.63. Its industry sports an average Forward P/E of 13.89, so we one might conclude that MGA is trading at a discount comparatively.

We can also see that MGA currently has a PEG ratio of 1.79. 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 1.17 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 167, which puts it in the bottom 35% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual 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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