Deutsche Bank Upgrades Magna International, Sees Sustained Stronger Growth

In a report published Wednesday, Deutsche Bank analysts upgraded the rating on Magna International, Inc. MGA to Buy, while raising the price target from $57 to $75. The analysts believe that the Street underestimates the company's potential for growth. "MGA has achieved an impressive turnaround in recent years, and has established credibility with regard to operational and financial management. But despite above average performance, the company is still viewed as an "average" supplier," the analysts said. The analysts believe that the company has the potential to deliver double digit annual growth for the Magna International's metal forming business, while its expansion into China could add 110 bps in terms of top line growth for the company. There could also be potential for longer term growth and margin upside. "Given the massive capex/R&D burdens facing Automakers, we believe that some may re-assess their make vs. buy decisions. This is already having an impact on segments that are directly relevant to MGA. Looking forward, we anticipate outsourcing of increasingly complex systems, benefiting the Industry's largest, most capable suppliers," the analysts added.