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Morgan Stanley Sees Sharp Upside In This Automobile Components Manufacturer

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  • Morgan Stanley analyst Adam Jonas upgraded American Axle & Manufacturing Holdings Inc (NYSE: AXL) to Overweight from Underweight with a price target of $16, up from $8, implying a 77% upside.

  • While many other legacy OEMs and suppliers plough cash flow into EV projects that "will likely not generate their cost of capital," Jonas thinks American Axle is different and believes that the company will likely use the majority of its cash flow to de-lever the balance sheet.

  • Jonas forecasts American Axle's levered free cash flow to be $1.5 billion through FY25, which he notes would be an amount equal to 150% of its market cap and enough to reduce about 60% of net debt.

  • Price Action: AXL shares are trading higher by 4.63% at $9.03 on the last check Monday.

Latest Ratings for AXL

Feb 2022

Morgan Stanley

Upgrades

Underweight

Overweight

Feb 2022

Deutsche Bank

Maintains

Hold

Feb 2022

Barclays

Maintains

Underweight

View More Analyst Ratings for AXL

View the Latest Analyst Ratings

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