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Martinrea International
(TSX:MRE)
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Rating:65Neutral
Price Target:
C$11.00
▲(8.27% Upside)
Action:Reiterated
Date:08/25/26
The score is driven primarily by mid-range financial performance: improved profitability and acceptable leverage are tempered by declining revenue and weak cash conversion. Valuation is a clear positive with a low P/E and a modest yield, while the earnings call supports a constructive outlook via reaffirmed guidance and new business wins despite near-term margin and Europe headwinds. Technicals are mixed as momentum is positive but the price remains below key moving averages.
Positive Factors
New business awards support future program revenue
Meaningful recent awards expand Martinrea’s contracted program base and support future production volumes. The breadth of wins across lightweight structures, propulsion and flexible manufacturing can strengthen OEM relationships and improve revenue visibility.
Negative Factors
Declining revenue and lost Ford Escape volumes
Recent revenue contraction signals weaker production volumes despite improved cost execution. The Ford Escape loss creates a persistent gap in the program portfolio, requiring new awards and ramp-ups to offset lower sales and protect manufacturing utilization.
Read all positive and negative factors
Positive Factors
Negative Factors
New business awards support future program revenue
Meaningful recent awards expand Martinrea’s contracted program base and support future production volumes. The breadth of wins across lightweight structures, propulsion and flexible manufacturing can strengthen OEM relationships and improve revenue visibility.
Read all positive factors
Martinrea International (MRE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$719.34M
Dividend Yield1.95%
Average Volume (3M)82.29K
Price to Earnings (P/E)6.0
Beta (1Y)1.34
Revenue Growth-2.65%
EPS GrowthN/A
CountryCA
Employees16,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)1.71
Shares Outstanding69,974,760
10 Day Avg. Volume67,415
30 Day Avg. Volume82,293
Financial Highlights & Ratios
PEG Ratio-0.02
Price to Book (P/B)0.50
Price to Sales (P/S)0.16
P/FCF Ratio4.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$13.50Price Target Upside32.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)2.11
Revenue Forecast (FY)C$4.68B
Martinrea International Business Overview & Revenue Model
Company Description
Martinrea International Inc. specializes in the design, development, manufacture, and distribution of a diverse range of metal components, sub-assemblies, fluid management systems, and aluminum products. These offerings primarily cater to the glob...
How the Company Makes Money
Martinrea makes money mainly by manufacturing and selling automotive components and systems to vehicle OEMs under long-term vehicle program supply arrangements. Revenue is primarily generated from (1) metal forming and assembly products (e.g., sta...
Martinrea International Earnings Call Summary
Earnings Call Date:Aug 04, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Nov 04, 2026
Earnings Call Sentiment Positive
The call presented a predominantly constructive operational and financial picture: management reinforced disciplined capital allocation, continued share repurchases, meaningful new business awards (CAD 110M this quarter; CAD 440M in last 12 months), sequential margin improvement and strong free cash flow generation with net debt reduction. Offsetting items include notable near-term headwinds in Europe (CAD 7.5M loss), temporary margin pressure from an aluminum price spike (~40 bps) and lost volume from the Ford Escape program which weigh on year‑over‑year margins. Management reaffirmed full‑year 2026 guidance and outlined a clear multi-year margin and revenue target for 2028, indicating confidence in recovery actions and the long‑term plan.Positive Updates
Strong Free Cash Flow and Capital Returns
Reported free cash flow before principal lease payments (IFRS 16) was CAD 52.8M and CAD 36.9M after principal lease payments in Q2. Reaffirmed 2026 free cash flow guidance of CAD 125M–CAD 175M. Since 2023 the company generated ~CAD 600M free cash flow, reduced net debt by >CAD 200M, repurchased ~CAD 100M of shares (over 10% of shares) and paid CAD 45M in dividends.
Negative Updates
Year-over-Year Margin Compression
Q2 consolidated adjusted operating income margin was 5.9% versus 6.8% in Q2 2025 — a decline of ~90 basis points year-over-year. Adjusted EPS fell to CAD 0.61 from CAD 0.66 (adjusted) versus prior-year quarter.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Free Cash Flow and Capital Returns
Reported free cash flow before principal lease payments (IFRS 16) was CAD 52.8M and CAD 36.9M after principal lease payments in Q2. Reaffirmed 2026 free cash flow guidance of CAD 125M–CAD 175M. Since 2023 the company generated ~CAD 600M free cash flow, reduced net debt by >CAD 200M, repurchased ~CAD 100M of shares (over 10% of shares) and paid CAD 45M in dividends.
Read all positive updates
Company Guidance
Martinrea reaffirmed its 2026 guidance: total sales of CAD 4.5–4.9 billion, adjusted operating income margin of 5.5%–6.0%, free cash flow of CAD 125–175 million and roughly CAD 300 million of CapEx (roughly in line with D&A); management said the company is on track to meet that outlook despite temporary headwinds (Q2 adjusted operating margin 5.9%, Q2 adjusted EPS CAD 0.61, reported free cash flow before IFRS16 principal CAD 52.8M / after CAD 36.9M, net debt CAD 801M down from CAD 819M, net debt/adjusted EBITDA ~1.63x vs a 1.5x target). They reiterated longer‑term 2028 targets of CAD 5.3–5.5 billion in sales and a 6.5%–7.0% adjusted operating margin, noted Europe is expected to approach breakeven for full‑year 2026 and improve in 2027, and highlighted near‑term drivers and puts/takes including a ~90‑day lagged aluminum pass‑through (aluminum headwind ~40 bps YoY), Q2 sequential margin improvement of ~40 bps, CAD 440M of new awards in the last 12 months (CAD 110M announced this quarter), cumulative new business since 2023 > CAD 1B, and ongoing capital return (919k shares repurchased for CAD 10M this quarter; materially active NCIB).Martinrea International Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
63
Positive
Cash Flow
54
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.70B | 4.82B | 5.01B | 5.34B | 4.76B | 3.78B |
| Gross Profit | 623.35M | 623.65M | 648.56M | 675.40M | 559.26M | 345.62M |
| EBITDA | 546.91M | 499.29M | 475.17M | 597.92M | 516.59M | 328.40M |
| Net Income | 122.40M | 106.98M | -34.55M | 153.66M | 132.84M | 35.88M |
Balance Sheet | ||||||
| Total Assets | 4.00B | 3.74B | 3.82B | 3.99B | 4.14B | 3.61B |
| Cash, Cash Equivalents and Short-Term Investments | 109.59M | 174.14M | 167.95M | 186.80M | 161.66M | 153.29M |
| Total Debt | 1.15B | 1.12B | 1.22B | 1.23B | 1.34B | 1.25B |
| Total Liabilities | 2.39B | 2.23B | 2.35B | 2.52B | 2.77B | 2.44B |
| Stockholders Equity | 1.61B | 1.51B | 1.47B | 1.47B | 1.38B | 1.17B |
Cash Flow | ||||||
| Free Cash Flow | 157.81M | 183.59M | 150.54M | 207.57M | 53.96M | -118.73M |
| Operating Cash Flow | 386.50M | 430.49M | 433.29M | 511.09M | 437.78M | 180.03M |
| Investing Cash Flow | -239.77M | -257.35M | -285.50M | -303.75M | -381.27M | -305.86M |
| Financing Cash Flow | -159.23M | -165.48M | -167.43M | -180.72M | -41.72M | 129.93M |
Martinrea International Technical Analysis
Negative
10.16
Price Trends
10.34
Negative
10.38
Negative
10.15
Positive
Market Momentum
-0.06
Positive
48.24
Neutral
33.79
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MRE, the sentiment is Negative. The current price of 10.16 is below the 20-day moving average (MA) of 10.42, below the 50-day MA of 10.34, and above the 200-day MA of 10.15, indicating a neutral trend. The MACD of -0.06 indicates Positive momentum. The RSI at 48.24 is Neutral, neither overbought nor oversold. The STOCH value of 33.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MRE.
Martinrea International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$5.90B | 8.70 | 10.96% | 1.19% | 9.32% | 227.52% | |
72 Outperform | C$24.33B | 24.28 | 6.14% | 2.97% | 1.59% | -35.21% | |
67 Neutral | C$298.40M | 12.25 | 6.04% | 5.28% | 0.52% | 5.03% | |
65 Neutral | C$719.34M | 6.01 | 7.89% | 1.95% | -2.65% | ― | |
63 Neutral | C$2.80B | 35.57 | 10.42% | 2.86% | 14.75% | ― | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
55 Neutral | C$3.48B | 193.78 | 0.61% | 0.50% | 16.14% | 22.41% |
* Consumer Cyclical Sector Average
TSE:MRE
Martinrea International
10.28
-1.10
-9.66%
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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.