| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 35.44 | -31 |
| Intrinsic value (DCF) | 14.84 | -71 |
| Graham-Dodd Method | 20.25 | -60 |
| Graham Formula | 28.60 | -44 |
Magna International Inc. (NYSE: MGA) is a leading global automotive supplier headquartered in Aurora, Canada, specializing in the design, engineering, and manufacturing of vehicle components, systems, and complete vehicles. Operating across four key segments—Body Exteriors & Structures, Power & Vision, Seating Systems, and Complete Vehicles—Magna serves original equipment manufacturers (OEMs) worldwide. The company provides a diverse product portfolio, including advanced driver assistance systems (ADAS), electrification solutions, lightweight structures, and complete vehicle assembly services. With a strong presence in the rapidly evolving automotive industry, Magna is well-positioned to capitalize on trends such as electric vehicle (EV) adoption, autonomous driving, and lightweighting. Its vertically integrated capabilities, from R&D to manufacturing, make it a critical partner for automakers navigating the shift toward sustainable mobility. Magna’s global footprint, technological expertise, and diversified customer base reinforce its relevance in the consumer cyclical sector.
Magna International presents a compelling investment case due to its diversified product offerings, strong OEM relationships, and exposure to high-growth automotive trends like electrification and ADAS. The company’s $42.8B revenue base and $3.35 diluted EPS reflect its scale and profitability, though its high beta (1.678) indicates sensitivity to macroeconomic cycles. Risks include reliance on cyclical auto production, supply chain disruptions, and capital-intensive operations (evidenced by $2.66B in capex). However, Magna’s $1.25B cash position and consistent dividend ($1.92/share) provide stability. Investors should weigh its growth potential in EV/ADAS against industry headwinds like chip shortages and inflationary pressures.
Magna International holds a competitive edge through its vertically integrated manufacturing capabilities, broad product portfolio, and strong R&D focus, particularly in electrification and ADAS. Unlike pure-play suppliers, Magna’s Complete Vehicles segment allows it to offer end-to-end solutions, a rarity in the industry. Its global scale (operations in 28 countries) ensures proximity to OEMs, reducing logistics costs. However, Magna faces intense competition from other Tier 1 suppliers, many of whom are also investing heavily in EV and autonomous tech. While Magna’s $9.99B market cap trails larger rivals like Continental, its agility and innovation in lightweighting (e.g., battery enclosures) differentiate it. The company’s reliance on traditional automakers—some of whom are insourcing components—poses a long-term risk, but its partnerships with EV startups (e.g., Fisker) mitigate this. Margins may lag peers due to its lower exposure aftermarket sales, which are typically higher-margin.