American Axle Investors Have A While To Wait For Positive Catalysts, Bearish Analyst Says

American Axle & Manufacturing Holdings Inc AXL shares were tanking in early trading on Tuesday.

There are no visible positive catalysts for the stock “until well into 2024,” according to BofA Securities.

The American Axle Analyst: John Murphy downgraded the rating for American Axle from Neutral to Underperform, while cutting the price target from $9 to $8.

Check out other analyst stock ratings.

The American Axle Thesis: The company could witness volume pressure in the final quarter of 2023 and the first quarter of 2024), while “persistent plant-level issues could also impact performance negatively,” Murphy said in the downgrade note.

The fourth quarter is likely to be “another tough quarter” for American Axle, with results likely reflecting “the impact of the now concluded UAW strike, which management estimated will reduce FY23 revenue and EBITDA by $70mm-$100mm and $25mm-$40mm, respectively,” the analyst wrote. He added, “This implies a 4Q:23 impact to revenue of $55mm-$85mm and EBITDA of $21mm-$36mm.”

“All that said, the company has a long history of solid execution and, as the tide turns through mid-2024, investors may become enamored with the stock again,” Murphy further stated.

AXL Price Action: Shares of American Axle had declined by 1.25% to $7.10 at the time of publication Tuesday.

Image: Pixabay