Magna International (TSE:MG)
TSX:MG
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Magna International
(TSX:MG)
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Rating:66Neutral
Price Target:
C$85.00
▲(8.32% Upside)
Action:DowngradedDate:02/18/26
The score is driven by solid financial health and cash generation plus a supportive 2026 outlook (margin expansion, strong free cash flow, buybacks). Offsetting these positives are weaker recent profitability trends, rising 2025 debt, and a notably overbought technical setup that increases near-term downside risk; valuation is reasonable but not especially cheap at ~22.8x earnings.
Positive Factors
Strong cash generation
Consistent operating cash flow (~$3.6B) and meaningful free cash flow provide durable internal funding for buybacks, dividends, low mid-single-digit capex, and program launches. Strong cash conversion improves resilience through automotive cycles and funds strategic investments over 2–6 months.
Negative Factors
Limited top-line momentum
Flat revenue growth reduces operating leverage and makes EPS gains reliant on margin recovery and buybacks. Durable growth depends on winning new OEM programs and favorable vehicle mix; lack of organic topline momentum is a structural headwind for multi-period earnings expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent operating cash flow (~$3.6B) and meaningful free cash flow provide durable internal funding for buybacks, dividends, low mid-single-digit capex, and program launches. Strong cash conversion improves resilience through automotive cycles and funds strategic investments over 2–6 months.
Read all positive factors
Magna International (MG) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$21.88B
Dividend Yield3.69%
Average Volume (3M)1.67M
Price to Earnings (P/E)17.8
Beta (1Y)1.38
Revenue Growth0.66%
EPS Growth-0.61%
CountryCA
Employees167,000
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)2.97
Shares Outstanding278,795,470
10 Day Avg. Volume1,375,426
30 Day Avg. Volume1,674,166
Financial Highlights & Ratios
PEG Ratio-1.18
Price to Book (P/B)1.20
Price to Sales (P/S)0.35
P/FCF Ratio8.26
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$90.81Price Target Upside15.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering15
EPS Forecast (FY)9.3
Revenue Forecast (FY)C$58.20B
Magna International Business Overview & Revenue Model
Company Description
Magna International Inc. designs, engineers, and manufactures components, assemblies, systems, subsystems, and modules for original equipment manufacturers of vehicles and light trucks worldwide. It operates through four segments: Body Exteriors &...
How the Company Makes Money
Magna primarily makes money by selling automotive parts, systems, and modules to vehicle OEMs under long-term supply contracts tied to specific vehicle programs. Revenue is largely generated from (1) manufacturing and supplying components such as ...
Magna International Earnings Call Summary
Earnings Call Date:Feb 13, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 01, 2026
Earnings Call Sentiment Positive
The call presents a largely positive picture: Magna delivered strong Q4 and full-year 2025 results with notable margin expansion, record free cash flow, a solid balance sheet and an encouraging 2026 outlook (sales near flat to modest growth, margin expansion, and robust free cash flow). Operational-excellence initiatives and technology partnerships underpin confidence. Downsides are mostly manageable: discrete P&V warranty/settlement items and ongoing recall work, program roll-offs (Complete Vehicles and some Seating impacts), and component/commodity cost uncertainty. Management cites mitigation actions (tariff recoveries, cost programs) and expects the positives to outweigh the transitory negatives in 2026.Positive Updates
Strong Q4 Financial Performance
Q4 sales of $10,800,000,000, up 2% year-over-year (or down ~1% on a constant-currency basis); Q4 adjusted EBIT margin expanded 100 basis points to 7.5%; Q4 adjusted EBIT rose 18% to $814,000,000; Q4 adjusted EPS was $2.18, up 29%.
Negative Updates
Complete Vehicles Revenue Pressure
Complete Vehicles sales declined 10% in the quarter, driven by lower engineering revenue and end-of-production for programs including Jaguar E‑PACE and I‑PACE; Complete Vehicles expected to remain a drag in 2026 with lower anticipated sales and margins.
Read all updates
Q4-2025 Updates
Positive
Negative
Strong Q4 Financial Performance
Q4 sales of $10,800,000,000, up 2% year-over-year (or down ~1% on a constant-currency basis); Q4 adjusted EBIT margin expanded 100 basis points to 7.5%; Q4 adjusted EBIT rose 18% to $814,000,000; Q4 adjusted EPS was $2.18, up 29%.
Read all positive updates
Company Guidance
Magna’s 2026 guidance calls for sales near flat to up 3.5% year-over-year (implying ~+1.5% over market at the midpoint), adjusted EBIT margin of 6.0–6.6% (up 40–100 bps from 2025’s 5.6%), adjusted EPS of $6.25–$7.25, and free cash flow of $1.6–$1.8 billion (over 90% of adjusted net income) with CapEx below 4% of sales (mid‑3%s), ~$180 million of interest expense and a 23% adjusted tax rate. Management expects operational excellence to contribute ~35–40 bps in 2026 (nearly +200 bps cumulative 2023–2026), first‑half EBIT just over 40% of full‑year (back‑half weighted), plans to repurchase ~22 million shares under the NCIB (assumes ~270 million average diluted shares), and targets leverage below 1.5x (ended 2025 at 1.58x) while maintaining $1.6 billion cash on hand and $5.1 billion total liquidity.Magna International Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
67
Positive
Cash Flow
72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 42.75B | 42.84B | 42.80B | 37.84B | 36.24B |
| Gross Profit | 4.41B | 5.80B | 5.61B | 4.65B | 5.14B |
| EBITDA | 3.83B | 3.78B | 3.79B | 3.16B | 3.58B |
| Net Income | 843.51M | 1.01B | 1.21B | 592.00M | 1.51B |
Balance Sheet | |||||
| Total Assets | 31.36B | 31.04B | 32.26B | 27.79B | 29.09B |
| Cash, Cash Equivalents and Short-Term Investments | 1.61B | 1.25B | 1.20B | 1.23B | 2.95B |
| Total Debt | 8.32B | 7.07B | 7.22B | 5.07B | 5.67B |
| Total Liabilities | 18.54B | 19.10B | 19.98B | 16.45B | 16.86B |
| Stockholders Equity | 12.47B | 11.52B | 11.88B | 10.94B | 11.84B |
Cash Flow | |||||
| Free Cash Flow | 1.82B | 1.46B | 601.00M | 414.00M | 1.57B |
| Operating Cash Flow | 3.66B | 3.63B | 3.15B | 2.10B | 2.94B |
| Investing Cash Flow | -1.73B | -2.59B | -4.50B | -2.04B | -2.28B |
| Financing Cash Flow | -1.56B | -989.00M | 1.34B | -1.73B | -1.11B |
Magna International Technical Analysis
Positive
78.47
Price Trends
78.25
Positive
74.84
Positive
67.23
Positive
Market Momentum
-0.99
Negative
52.27
Neutral
73.85
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MG, the sentiment is Positive. The current price of 78.47 is above the 20-day moving average (MA) of 76.64, above the 50-day MA of 78.25, and above the 200-day MA of 67.23, indicating a bullish trend. The MACD of -0.99 indicates Negative momentum. The RSI at 52.27 is Neutral, neither overbought nor oversold. The STOCH value of 73.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MG.
Magna International Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | C$15.19B | 18.88 | 14.55% | 1.44% | 7.12% | 17.15% | |
70 Outperform | C$5.28B | 8.51 | 9.92% | 1.32% | -5.33% | -57.58% | |
69 Neutral | C$284.18M | 13.48 | 6.05% | 6.21% | -3.53% | -17.19% | |
66 Neutral | C$21.88B | 17.79 | 6.73% | 3.69% | 0.66% | -0.61% | |
63 Neutral | C$683.37M | 7.04 | 7.13% | 1.93% | -7.25% | -143.07% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
43 Neutral | C$473.65M | 34.08 | 18.07% | ― | -26.93% | 84.17% |
* Consumer Cyclical Sector Average
TSE:MG
Magna International
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31.96
71.40%
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Magna International Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Magna Delivers Strong Q4 2025, Sets Confident 2026 Outlook With Buyback Plan
Positive
Feb 13, 2026
Magna International reported fourth-quarter 2025 sales of $10.8 billion, up 2% despite a 1% decline in global light vehicle production, driven by higher volumes on ongoing and new programs and favorable currency movements. Adjusted EBIT rose 18% t...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.