Last week, you might have seen that Magna International Inc. (TSE:MG) released its quarterly result to the market. The early response was not positive, with shares down 3.0% to CA$45.95 in the past week. Results overall were not great, with earnings of US$0.52 per share falling drastically short of analyst expectations. Meanwhile revenues hit US$10b and were slightly better than forecasts. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
After the latest results, the consensus from Magna International’s 15 analysts is for revenues of US$39.7b in 2025, which would reflect a perceptible 5.4% decline in revenue compared to the last year of performance. Per-share earnings are expected to step up 12% to US$4.55. Before this earnings report, the analysts had been forecasting revenues of US$39.3b and earnings per share (EPS) of US$4.34 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.
Check out our latest analysis for Magna International
The consensus price target was unchanged at CA$57.66, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. The consensus price target is just an average of individual analyst targets, so – it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Magna International, with the most bullish analyst valuing it at CA$77.06 and the most bearish at CA$43.03 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 7.1% by the end of 2025. This indicates a significant reduction from annual growth of 5.7% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.4% annually for the foreseeable future. It’s pretty clear that Magna International’s revenues are expected to perform substantially worse than the wider industry.
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Magna International following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it’s tracking in line with expectations. Although our data does suggest that Magna International’s revenue is expected to perform worse than the wider industry. The consensus price target held steady at CA$57.66, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn’t be too quick to come to a conclusion on Magna International. Long-term earnings power is much more important than next year’s profits. At Simply Wall St, we have a full range of analyst estimates for Magna International going out to 2027, and you can see them free on our platform here..
You can also view our analysis of Magna International’s balance sheet, and whether we think Magna International is carrying too much debt, for free on our platform here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.