• The consensus price target for Magna International Inc. (NYSE:MGA) has decreased over the past year, indicating a changing outlook among analysts.
• Magna has reported strong financial results for the fiscal year 2024, with earnings per share surpassing analysts' expectations and demonstrating improved EBIT and cost management.
• Despite challenges, Magna projects sales growth and an expanded adjusted EBIT margin by 2026, with a price target of $81 set by Citigroup analyst Itay Michaeli.

Magna International Inc. (NYSE:MGA) is a prominent player in the automotive industry, specializing in the design, engineering, and manufacturing of automotive components and systems. The company operates through four main segments: Body Exteriors & Structures, Power & Vision, Seating Systems, and Complete Vehicles. Magna serves original equipment manufacturers (OEMs) of vehicles and light trucks globally, offering a diverse product portfolio.

The consensus price target for Magna's stock has seen a downward trend over the past year. Last month, the average target was $37, a decrease from $42.33 three months ago, and significantly lower than $50.6 a year ago. This suggests a shift in analysts' outlook on the company's future performance, possibly due to changes in the automotive industry or economic conditions.

Despite the declining price targets, Magna has reported strong financial results. For the fiscal year 2024, the company surpassed analysts' expectations for earnings per share, demonstrating improved earnings before interest and taxes (EBIT) and effective cost management strategies. Magna's trailing price-to-earnings ratio of 7.01 and enterprise value to EBITDA ratio of 4.55 indicate that the company is currently undervalued, offering a 23% margin of safety.

Magna's recent fourth-quarter earnings exceeded expectations, with earnings of $1.69 per share, surpassing the Zacks Consensus Estimate of $1.46 per share. The company reported a 2% increase in sales to $10.6 billion, aligning with global light vehicle production. Magna generated $1.9 billion in cash from operating activities and returned $335 million to shareholders through dividends and share repurchases.

Looking ahead, Magna anticipates its 2025 revenues to be between $38.6 billion and $40.2 billion, with challenges expected from foreign currency translation and lower light vehicle production. However, the company projects sales growth to between $40.5 billion and $42.6 billion by 2026, with an expanded adjusted EBIT margin of 6.5% to 7.2%. Analyst Itay Michaeli from Citigroup has set a price target of $81 for Magna, reflecting a cautious yet optimistic outlook on the stock's performance.