MGA changes
Pick any two versions below to diff them.
- Price
- $63.82 → $62.68(−1.8%)
- Thesis
- The market prices Magna for the risks of the auto cycle. Global light vehicle production fell 2% in Q2 2026, with lower production in North America, Europe and China. In Q3 2026, production fell 5% in North America and 7% in China. Tariffs, price concessions to car makers and the end of some programs put pressure on sales and margins, and the Complete Vehicles business depends on a few contracts. Investors fear that car makers produce fewer vehicles in 2027 and that Magna cannot keep its recent margin gains. For the gap to close, three things must be true. Magna must reach its 2026 outlook of October 30, 2026: an Adjusted EBIT margin of 6.3% to 6.5% and free cash flow of $1.85 billion to $1.90 billion. It must recover most tariff costs from its customers. Its 2027 outlook, which it usually gives in February, must show further margin growth even if vehicle production stays flat. removed: The added: At its Investor Day on November 11, removed: 2026 added: 2026, Magna set 2030 targets for at least 200 basis points of margin gain and removed: the added: adjusted EPS growth of at least 15% a year. The 2027 outlook, expected with the Q4 2026 report in early 2027, removed: give added: gives the next evidence. If these checks pass, the gap can close over the next three to five quarters. The main reason it may not close is a fall in vehicle production, which lowers volume and margins at the same time.
- Checkpoints
- Oct 30, 2026: Q3 2026 earnings: margin outlook. Passed. Watch: Results that keep the 6.3% to 6.6% Adjusted EBIT margin outlook and the free cash flow outlook pass; a cut to the outlook fails. Outcome: Magna kept the midpoint of its adjusted EPS outlook, raised free cash flow to $1.85 billion to $1.90 billion, and narrowed the margin outlook to 6.3% to 6.5%. Nov 11, 2026: Investor Day: longer-term outlook. removed: Pending. added: Passed. Watch: Longer-term targets for higher margins and strong cash returns pass; targets that show lower margins fail. added: Outcome: Magna set 2030 targets of at least 200 basis points of Adjusted EBIT margin gain, adjusted EPS growth of at least 15% a year and free cash flow of at least 85% of adjusted net income. Jan 30, 2027 (estimate): Q4 2026 results and 2027 outlook. Pending. Watch: An outlook for a higher Adjusted EBIT margin in 2027 passes; a lower margin outlook because of weak production fails.
- Recent events
- added: Nov 11, 2026: Magna held its Investor Day and set targets through 2030. Organic sales growth is to be 2% to 4% above the market each year. The Adjusted EBIT margin is to rise by at least 200 basis points from 2026 to 2030. Adjusted EPS is to grow at least 15% a year. Free cash flow is to be at least 85% of adjusted net income on average from 2027 to 2030, and adjusted ROIC is to be above 15% by 2030. Magna said that more than 90% of its expected 2028 sales and more than 60% of its expected 2030 sales come from existing business and awarded programs. Nov 5, 2026: The Toronto Stock Exchange accepted Magna's notice to renew its normal course issuer bid. Magna may buy back up to 25,778,000 shares, about 10% of its public float, from November 9, 2026, to no later than November 8, 2027. Oct 30, 2026: Magna reported Q3 2026 results. Sales fell 4% to $10.1 billion because of lower vehicle production and the divestitures. Adjusted EBIT rose 11% to $683 million, a margin of 6.8%, and adjusted EPS rose 38% to $1.83. Free cash flow was $584 million. Magna lowered its 2026 sales outlook to $41.2 billion to $42.0 billion, narrowed its Adjusted EBIT margin outlook to 6.3% to 6.5%, set adjusted EPS at $6.85 to $7.15 and raised free cash flow to $1.85 billion to $1.90 billion. Oct 30, 2026: In Q3 2026, Magna repurchased 7.9 million shares for $529 million, and it repurchased the last 1.3 million shares of its current program in October. The board approved a new program to repurchase up to about 25.8 million shares, 10% of the public float, subject to Toronto Stock Exchange approval. Magna will hold an Investor Day on November 11, 2026. Jul 31, 2026: Magna reported Q2 2026 results. Sales rose 3% to $11.0 billion, while global light vehicle production fell 2%. Adjusted EBIT rose 16% to $677 million, a margin of 6.2%, and adjusted EPS rose 29% to $1.86. Free cash flow was $617 million. Magna raised its 2026 outlook for the Adjusted EBIT margin to 6.3% to 6.6%, for adjusted EPS to $6.70 to $7.30 and for free cash flow to $1.75 billion to $1.85 billion. Jul 31, 2026: In Q2 2026, Magna returned $598 million to shareholders. It paid dividends of $133 million and repurchased 7.4 million shares for $465 million. It completed the Lighting and Rooftop Systems divestitures earlier than it expected, and it declared a quarterly dividend of $0.495 per share. Apr 22, 2026: Magna extended its $800 million 364-day revolving credit facility to June 24, 2027 and its $2.7 billion revolving credit facility to June 25, 2031. No amounts were drawn on either facility at June 30, 2026.