NEW YORK (TheStreet) -- Magna International (MGA) - Get Report stock closed higher by 0.45% to $47.15 on heavy trading volume on Friday, after Canaccord said the automotive supplier will have limited exposure to the fallout of the Volkswagen (VLKAY) emission scandal.
Magna, which reported that 11.3% of its 2014 sales were to Volkswagen, may only have an earnings impact of 12 cents per share, Canaccord said in an analysts note.
Analysts have estimated that the company will report earnings of $4.66 per share for 2015.
Additionally, Volkswagen's new engine for diesel-powered passenger cars should meet regulations with some adjustments, but a costly design overhaul is not expected, analysts noted.
Aurora, Ontario-based Magna produces a range of automobile parts, including electronic, seating, vehicle engineering, chassis and body.
By the end of the trading day, 2.42 million shares of Magna had exchanged hands, compared with its average daily volume of 1.77 million shares.
Separately, TheStreet Ratings team rates MAGNA INTERNATIONAL INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
We rate MAGNA INTERNATIONAL INC (MGA) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its growth in earnings per share, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had sub par growth in net income.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- MAGNA INTERNATIONAL INC has improved earnings per share by 9.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, MAGNA INTERNATIONAL INC increased its bottom line by earning $4.40 versus $3.39 in the prior year. This year, the market expects an improvement in earnings ($4.62 versus $4.40).
- MGA's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.87 is somewhat weak and could be cause for future problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Auto Components industry and the overall market on the basis of return on equity, MAGNA INTERNATIONAL INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- MGA, with its decline in revenue, slightly underperformed the industry average of 5.3%. Since the same quarter one year prior, revenues slightly dropped by 8.7%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- You can view the full analysis from the report here: MGA