How Will American Axle & Manufacturing (AXL) Stock React To This Analyst Action Today?

NEW YORK (TheStreet) -- American Axle & Manufacturing Holdings  (AXL) was upgraded to "neutral" from "underweight" at JP Morgan Chase  (JPM) with a price target of $22, up from $20.

The U.S. auto parts company stock is up 1.04% to $19.35 in pre-market trading today.

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Separately, TheStreet Ratings team rates AMERICAN AXLE & MFG HOLDINGS as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate AMERICAN AXLE & MFG HOLDINGS (AXL) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its notable return on equity, revenue growth, increase in net income and growth in earnings per share. We feel these strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to other companies in the Auto Components industry and the overall market, AMERICAN AXLE & MFG HOLDINGS's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The revenue growth came in higher than the industry average of 3.0%. Since the same quarter one year prior, revenues rose by 13.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Auto Components industry. The net income increased by 360.3% when compared to the same quarter one year prior, rising from $7.30 million to $33.60 million.
  • AMERICAN AXLE & MFG HOLDINGS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AMERICAN AXLE & MFG HOLDINGS reported lower earnings of $1.24 versus $4.84 in the prior year. This year, the market expects an improvement in earnings ($2.44 versus $1.24).
  • The gross profit margin for AMERICAN AXLE & MFG HOLDINGS is rather low; currently it is at 19.66%. Regardless of AXL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, AXL's net profit margin of 3.91% compares favorably to the industry average.
  • You can view the full analysis from the report here: AXL Ratings Report
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