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Magna International
(TSX:MG)
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Rating:72Outperform
Price Target:
C$98.00
▲(7.33% Upside)
Action:Upgraded
Date:08/04/26
TSE:MG scores 72 primarily due to solid financial performance (strong revenue rebound, manageable leverage, and robust free cash flow) and a positive earnings-call outlook with raised 2026 guidance and continued capital returns. Technicals are supportive with the stock trading above key moving averages and positive MACD. The main offset is valuation, with a relatively high P/E despite a decent dividend yield.
Positive Factors
Revenue and margin growth
Magna is growing faster than its weighted vehicle-production markets while expanding adjusted EBIT margins. That combination suggests operational improvements and stronger program execution are converting volume into better earnings, supporting more durable profitability over the next several quarters.
Negative Factors
Thin profitability
Low margins leave limited protection against commercial pressures, commodity costs, mix changes, or production volatility. The decline in TTM net income also indicates that revenue recovery has not yet translated fully into earnings, making sustained margin improvement important to the investment case.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue and margin growth
Magna is growing faster than its weighted vehicle-production markets while expanding adjusted EBIT margins. That combination suggests operational improvements and stronger program execution are converting volume into better earnings, supporting more durable profitability over the next several quarters.
Read all positive factors
Magna International (MG) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$23.75B
Dividend Yield3.04%
Average Volume (3M)933.05K
Price to Earnings (P/E)23.5
Beta (1Y)1.20
Revenue Growth1.59%
EPS Growth-35.21%
CountryCA
Employees156,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)2.71
Shares Outstanding265,454,350
10 Day Avg. Volume1,290,422
30 Day Avg. Volume933,049
Financial Highlights & Ratios
PEG Ratio-1.18
Price to Book (P/B)1.20
Price to Sales (P/S)0.36
P/FCF Ratio8.26
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$100.22Price Target Upside9.75% Upside
Rating ConsensusHold
Number of Analyst Covering14
EPS Forecast (FY)9.94
Revenue Forecast (FY)C$59.07B
Magna International Business Overview & Revenue Model
Company Description
Magna International Inc. is a leading global automotive supplier that engineers and manufactures a comprehensive range of components, assemblies, and systems for original equipment manufacturers of cars and light trucks worldwide. Its operations a...
How the Company Makes Money
Magna primarily makes money by supplying automotive parts and systems to OEMs under production supply contracts, earning revenue based on the volume of vehicles produced by its customers and the per-vehicle content Magna provides. Its key revenue ...
Magna International Earnings Call Summary
Earnings Call Date:Jul 31, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Feb 12, 2027
Earnings Call Sentiment Positive
The call conveyed a constructive and confident tone: the company reported strong Q2 financial performance (sales growth, double-digit adjusted EBIT increase, record Q2 EPS, and materially improved free cash flow), upgraded its full-year outlook, and highlighted significant business wins and balance-sheet strength (improved ratings, liquidity, and active share repurchases). Notable near-term headwinds include weaker China production assumptions, earlier-than-expected divestiture-related revenue reductions, discrete commercial items and commodity/mix pressures, and some timing uncertainty around tariff recoveries and one-time tax/recovery items. On balance, management emphasized durable operational-excellence gains and disciplined capital allocation, and the positives appear to materially outweigh the challenges for 2026 execution.Positive Updates
Revenue and Organic Growth
Q2 sales of $11.0B, up ~3% year-over-year; organic sales up ~2% excluding FX; Magna-weighted light vehicle production down ~1% translating to ~3% growth over market consolidated (4% excluding complete vehicles).
Negative Updates
China Production and Exposure
Reduced full-year China production estimate by ~800k units; management acknowledged regional headwinds and competition from Chinese OEMs that can negatively impact China sales and mix; Complete Vehicles sales in China dynamics sensitive to mix shifts.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Organic Growth
Q2 sales of $11.0B, up ~3% year-over-year; organic sales up ~2% excluding FX; Magna-weighted light vehicle production down ~1% translating to ~3% growth over market consolidated (4% excluding complete vehicles).
Read all positive updates
Company Guidance
Magna raised and narrowed its full-year 2026 guidance, now targeting weighted sales growth over market of about 1% at the midpoint (positive growth over market of 1–3% excl. Complete Vehicles) after updating regional production assumptions (+100k NA, +200k Europe, −800k China) and FX/divestiture impacts (roughly $400M of sales exiting from lighting/rooftop deals closing sooner). Adjusted EBIT margin is guided to 6.3–6.6% (midpoint +15 bps vs prior, ~85 bps above 2025), adjusted EPS to $6.70–$7.30 (midpoint $7.00, +$0.25 vs prior, +22% y/y), and free cash flow to $1.8B at the midpoint (up $100M; ~95% free cash conversion). Other assumptions: full-year adjusted tax rate ~23% (Q2 was 19.1%), slightly higher equity income, slightly lower interest expense, Q2 implied second-half EPS of $3.76 with a ~40/60 Q3/Q4 split, and a net tariff impact expected to be similar to 2025.Magna International Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
71
Positive
Cash Flow
80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 42.38B | 42.01B | 42.84B | 42.80B | 37.84B | 36.24B |
| Gross Profit | 4.99B | 5.99B | 5.80B | 5.61B | 4.65B | 5.14B |
| EBITDA | 3.71B | 4.19B | 3.78B | 3.79B | 2.61B | 3.58B |
| Net Income | 749.08M | 843.51M | 1.01B | 1.21B | 592.00M | 1.51B |
Balance Sheet | ||||||
| Total Assets | 31.24B | 31.36B | 31.04B | 32.26B | 27.79B | 29.09B |
| Cash, Cash Equivalents and Short-Term Investments | 1.45B | 1.61B | 1.25B | 1.20B | 1.23B | 2.95B |
| Total Debt | 6.47B | 6.69B | 7.07B | 7.22B | 5.07B | 5.67B |
| Total Liabilities | 19.15B | 18.54B | 19.10B | 19.98B | 16.45B | 16.86B |
| Stockholders Equity | 11.75B | 12.47B | 11.52B | 11.88B | 10.94B | 11.84B |
Cash Flow | ||||||
| Free Cash Flow | 3.08B | 1.82B | 1.46B | 601.00M | 414.00M | 1.57B |
| Operating Cash Flow | 4.52B | 3.66B | 3.63B | 3.15B | 2.10B | 2.94B |
| Investing Cash Flow | -1.61B | -1.73B | -2.59B | -4.50B | -2.04B | -2.28B |
| Financing Cash Flow | -2.99B | -1.56B | -989.00M | 1.34B | -1.73B | -1.11B |
Magna International Technical Analysis
Negative
91.31
Price Trends
91.69
Negative
92.40
Negative
86.13
Positive
Market Momentum
-0.48
Positive
44.11
Neutral
32.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MG, the sentiment is Negative. The current price of 91.31 is below the 20-day moving average (MA) of 91.55, below the 50-day MA of 91.69, and above the 200-day MA of 86.13, indicating a neutral trend. The MACD of -0.48 indicates Positive momentum. The RSI at 44.11 is Neutral, neither overbought nor oversold. The STOCH value of 32.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MG.
Magna International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | C$16.34B | 20.66 | 14.41% | 1.42% | 5.44% | 4.67% | |
73 Outperform | C$5.30B | 7.83 | 10.96% | 1.32% | 9.32% | 227.52% | |
72 Outperform | C$23.75B | 23.55 | 6.15% | 3.04% | 1.59% | -35.21% | |
67 Neutral | C$317.52M | 13.03 | 6.04% | 4.96% | 0.52% | 5.03% | |
65 Neutral | C$673.86M | 5.63 | 7.89% | 2.08% | -2.65% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
52 Neutral | C$645.26M | 20.95 | 6.64% | 3.54% | 0.35% | ― |
* Consumer Cyclical Sector Average
TSE:MG
Magna International
89.46
28.97
47.89%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.