J.P Morgan Trims It's PT On Magna International To $64

J.P Morgan trims its Dec-2011 price target on Magna International MGA from $66 to $64 based on an unchanged 5x multiple applied to its reduced 2012e EBITDA of $2.6B. J.P Morgan maintains an Overweight rating given sizable company-specific margin expansion potential and potential to do accretive acquisitions with its $2B net cash position, but stock is likely to take a breather near term as market digests downgrades to 2011 consensus. MGA reported 4Q EPS of $0.99, above JPMe but slightly below Bloomberg consensus with most of the upside vs. J.P Morgan's model driven by lower tax rates. North America was the only region with healthy EBIT margins, while margins in Europe and RoW deteriorated due to higher launch costs and commodity headwinds. E-car division's loss widened considerably more than expected, to -$37MM in 4Q vs. -$16MM in 3Q:10. FCF in the quarter was significantly stronger, led by $499MM in favorable working-capital-related swings. Global EBIT margin in Q4.2010 of 3.8% came in weaker than expected; on the call, management outlined a list of headwinds that pressured Q4, including commodities, rising E-car start-up costs, profit sharing, ongoing operational inefficiencies at European interior/exterior facilities. J.P Morgan has a $64 PT and Overweight rating on MGA MGA closed Wednesday at $55.73