Magna (MGA) Set for Big Gains in Electrification Program

Magna International MGA is commissioning automakers worldwide to have electrified vehicle platforms featuring a full range of hybrid and entirely electric powertrain solutions. The move comes in the light of society’s rapid transition to electrified vehicles to ensure a reduced environmental footprint.

The company has recently been awarded a Hybrid Dual-Clutch Transmission (HDT) from Mercedes-Benz for its next-generation compact and mid-size vehicles. The award is a testimony to Magna’s efforts toward continuing transformation in mobility electrification and is a result of its long-term partnership with Mercedes-Benz. It also recognizes the vital importance of hybrid technologies and a diverse powertrain portfolio in the electrification journey.

Despite migrating to hybrid and electric vehicles, the company has provisions to supply both traditional products and electrified components to automakers. Magna will be launching two other HDT programs in the coming months with global OEMs as it seeks to extend its foothold into powertrain electrification.

Magna is invested in its efforts toward electrification. Its recent Mezzo Panel technology, which is a first-to-market, large format, decorated front-integration panel, is believed to change the face of electric vehicles. It has won a contract from Daimler for next-generation mid-sized and compact vehicles. It has also inked an agreement for front camera with a Europe-based global OEM. These are strengthening its position in the domain of electrification. MGA seeks to achieve more than $2 billion in managed powertrain electrification sales by 2023 and above $4 billion by 2027.

The company’s shares have risen 26.7% in the past year against its industry’s decline of 37%.

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Zacks Rank & Key Picks

Magna currently carries a Zacks Rank #5 (Strong Sell).

Better-ranked peers in the same space include Goodyear GT, flaunting a Zacks Rank #1 (Strong Buy) and Genuine Parts GPC and Dorman Products DORM, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Goodyear has an expected earnings growth rate of 197% for the current year. The Zacks Consensus Estimate for earnings for the current year has been revised 77% upward over the last 60 days.

Goodyear beat the Zacks Consensus Estimate for earnings in all the four trailing quarters. The company pulled off a trailing four-quarter earnings surprise of roughly 228.5%, on average. Its shares have also gained around 99% over a year.

Genuine Parts has an expected earnings growth rate of 27.3% for the current year. The Zacks Consensus Estimate for the current year has been revised around 5% upward over the past 60 days.

Genuine Parts beat the Zacks Consensus Estimate for earnings in all of the four trailing quarters. The company delivered a trailing four-quarter earnings surprise of roughly 16%, on average. Its shares have rallied around 33.5% over a year.

Dorman has an expected earnings growth rate of 36% for the current year. The Zacks Consensus Estimate for the current year has been revised 2% upward over the past 60 days.

Dorman beat the Zacks Consensus Estimate for earnings in all of the four trailing quarters. The company pulled off a trailing four-quarter earnings surprise of roughly 10.41%, on average. Its shares have also rallied around 22% over a year.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.