Magna International (TSX:MG) has been quietly rewarding patient shareholders, with the stock up roughly 12% over the past month and nearly 30% over the past year, outpacing many auto sector peers.
See our latest analysis for Magna International.
That solid 26.4% year to date share price return, supported by a 29.8% one year total shareholder return, suggests momentum is building as investors warm to Magna’s earnings recovery and auto cycle leverage.
If Magna’s recent run has you rethinking the auto space, it is worth exploring other auto manufacturers that could be next in line for a rerating.
Yet with shares now trading above the average analyst price target, but still showing a meaningful intrinsic value discount, the key question is whether Magna remains mispriced or if the market is already pricing in the next leg of growth.
With Magna trading at CA$75.13 against a narrative fair value of roughly CA$69.38, the story hinges on rising margins and measured growth.
Magna International is focusing on operational excellence and restructuring actions, which are expected to result in meaningful margin expansion over the next two years. This is likely to positively impact net margins and earnings.
Want to see the math behind this premium price tag? The narrative leans on improving margins and future earnings power that might surprise you. Curious?
Result: Fair Value of $69.38 (OVERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, persistent macro pressures and weaker EV demand could easily derail those margin gains and temper the upbeat earnings trajectory that is baked into today’s valuation.
Find out about the key risks to this Magna International narrative.
Step away from the narrative fair value and Magna looks quite different. On earnings, the shares trade at 14.9 times compared with 19.8 times for the wider North American auto components group, and still sit about 19.6 percent below our own fair value estimate.
That gap suggests the market is either discounting real risks or overlooking a quietly improving story, leaving investors to decide whether this is a safety margin or a warning sign.
See what the numbers say about this price — find out in our valuation breakdown.
If this perspective does not fully align with your view or you would rather dig into the numbers yourself, you can build a custom narrative in under three minutes, Do it your way.
A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Magna International.
Do not stop with one compelling opportunity. Broaden your edge by scanning fresh ideas from the Simply Wall St screener before the market catches up.
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.
Companies discussed in this article include MG.TO.
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