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Martinrea International (TSE:MRE)
TSX:MRE
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Martinrea International
(TSX:MRE)
Rating:62Neutral
Price Target:
C$10.00
▼(-7.66% Downside)
Positive Factors
Stock Stability
There is likely limited downside in the stock, suggesting some stability in MRE shares.
Stock Valuation
MRE's shares are trading at just under 3x forward EBITDA, which is at the lower end of its historical valuation range.
Negative Factors
Industry Outlook
Flat industry production in North America is expected, which could limit Martinrea International Inc.'s growth.
Market Comparison
Analysts see less potential upside in MRE shares compared to other companies like MGA and LNR.
Performance Expectations
MRE's performance is expected to largely trend with industry production, offering less margin improvement compared to competitors.
Martinrea International (MRE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$805.03M
Dividend Yield1.85%
Average Volume (3M)198.45K
Price to Earnings (P/E)5.7
Beta (1Y)1.21
Revenue Growth-8.84%
EPS Growth-148.15%
CountryCA
Employees17,000
SectorConsumer Cyclical
Sector Strength81
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.66
Shares Outstanding72,787,850
10 Day Avg. Volume312,774
30 Day Avg. Volume198,454
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap2.03
Enterprise Value/Revenue0.34
Enterprise Value/Gross Profit2.60
Enterprise Value/Ebitda3.85
Forecast
1Y Price Target
$12.00Price Target Upside10.80% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Martinrea International Business Overview & Revenue Model
Company DescriptionMartinrea International Inc. is a global automotive supplier headquartered in Ontario, Canada, specializing in the design and manufacturing of metal parts, assemblies, and modules for the automotive industry. The company operates primarily in two sectors: the Automotive Products segment, which includes body and chassis, and the Fluid Management segment, focused on fluid transfer systems and fuel delivery components. Martinrea provides high-quality products and services to major automotive manufacturers and strives for innovation in vehicle lightweighting and sustainability.
How the Company Makes MoneyMartinrea International generates revenue primarily through the sale of automotive components and systems to various original equipment manufacturers (OEMs) and Tier 1 suppliers. Key revenue streams include the production of metal stamping components, welded assemblies, and fluid management systems. The company also benefits from long-term contracts with major automotive players, ensuring a consistent flow of orders. Strategic partnerships with leading automotive manufacturers enhance its market position and provide opportunities for collaborative development of new technologies. Factors contributing to earnings include operational efficiency, investment in advanced manufacturing techniques, and a focus on research and development to meet the evolving needs of the automotive industry.
Martinrea International Earnings Call Summary
Earnings Call Date:Aug 12, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 12, 2025
Earnings Call Sentiment Positive
The earnings call reflected a strong second quarter performance for Martinrea, with significant advancements in machine learning technologies and new business awards. However, some challenges remain due to tariffs and expected seasonal slowdowns in production. The overall sentiment of the call is positive, focusing on operational improvements and a strong financial outlook.Q2-2025 Updates
Positive Updates
Strong Q2 Performance
Martinrea reported a strong second quarter with high operating margins and free cash flow. Adjusted operating income was $86.1 million, up from $81.6 million in Q2 of the previous year, with an adjusted operating income margin of 6.8%, reflecting operational improvements and lower SG&A.
Machine Learning and AI Initiatives
Martinrea's in-house development of machine learning technologies has led to substantial cost savings and efficiency improvements. For example, their adaptive welding software saved $3.5 million annually in a pilot plant and improved production line efficiency from 79% to 94%.
Commercial Recoveries and New Business Awards
Martinrea was awarded new business worth $40 million in annualized sales. They also continue to receive recoveries for OEM volume shortfalls and inflationary costs through commercial negotiations.
Financial Strength and Outlook
Free cash flow before IFRS 16 lease payments was $72 million, up from $51.7 million in the same quarter last year. The company is on track to meet its 2025 outlook with total sales between $4.8 billion to $5.1 billion and free cash flow of $125 million to $175 million.
Negative Updates
Tariff Impact
Despite being manageable, Martinrea faced headwinds due to tariffs, particularly on steel and aluminum, affecting their Tier 2 suppliers and some product lines.
Seasonal and Production Challenges
Production sales are expected to be lower in the second half of the year due to typical seasonal patterns and holiday shutdowns, leading to potentially lower margins.
Company Guidance
During the Martinrea International Second Quarter 2025 Results Conference Call, the company provided optimistic guidance based on its strong performance in Q2. The adjusted operating income was $86.1 million, up from $81.6 million the previous year, with a year-over-year adjusted operating income margin increase of 50 basis points to 6.8%. Free cash flow before IFRS 16 lease payments rose to $72 million from $51.7 million, aligning with a full-year outlook of $125 million to $175 million. The company maintained its 2025 outlook, projecting total sales between $4.8 billion and $5.1 billion and an adjusted operating income margin of 5.3% to 5.8%. The call emphasized ongoing operational improvements, such as the installation of machine learning technologies, which contributed to significant savings and efficiencies, including a total annual saving of $3.5 million in their pilot plant. These initiatives, along with a $50 million SG&A cost reduction program and new business awards worth $40 million in annualized sales, reinforce Martinrea's positive outlook despite manageable tariff impacts.Martinrea International Financial Statement Overview
Summary
Martinrea International faces profitability challenges with declining revenue and negative net income in the TTM. The balance sheet shows manageable leverage, but the negative return on equity is concerning. Cash flow generation is a positive aspect, with improvements in free cash flow growth.Income Statement
The income statement shows a challenging period for Martinrea International, with declining revenue and negative net profit margins in the TTM. The gross profit margin remains relatively stable, but the company is struggling with profitability as indicated by negative net income and declining EBIT margins. Revenue growth has been negative, reflecting potential market challenges or operational inefficiencies.45
Neutral
Balance Sheet
The balance sheet indicates moderate leverage with a debt-to-equity ratio below 1, suggesting manageable debt levels. However, the negative return on equity in the TTM highlights profitability issues. The equity ratio is stable, indicating a solid asset base relative to equity.55
Neutral
Cash Flow
Cash flow analysis reveals a positive free cash flow growth rate in the TTM, suggesting improved cash generation. The operating cash flow to net income ratio is healthy, indicating good cash conversion despite negative net income. However, the free cash flow to net income ratio reflects challenges in translating earnings into free cash flow.60
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.83B | 5.01B | 5.34B | 4.76B | 3.78B | 3.38B |
| Gross Profit | 628.52M | 648.56M | 675.40M | 559.26M | 345.62M | 415.10M |
| EBITDA | 424.38M | 475.17M | 601.48M | 516.59M | 332.32M | 263.75M |
| Net Income | -63.61M | -34.55M | 153.66M | 132.84M | 35.88M | -27.32M |
Balance Sheet | ||||||
| Total Assets | 3.84B | 3.82B | 3.99B | 4.14B | 3.61B | 3.37B |
| Cash, Cash Equivalents and Short-Term Investments | 160.03M | 167.95M | 186.80M | 161.66M | 153.29M | 152.79M |
| Total Debt | 1.18B | 1.22B | 1.23B | 1.34B | 1.25B | 1.05B |
| Total Liabilities | 2.37B | 2.35B | 2.52B | 2.77B | 2.44B | 2.19B |
| Stockholders Equity | 1.47B | 1.47B | 1.47B | 1.38B | 1.17B | 1.18B |
Cash Flow | ||||||
| Free Cash Flow | 149.87M | 150.54M | 207.57M | 53.96M | -118.73M | 54.13M |
| Operating Cash Flow | 446.81M | 433.29M | 511.09M | 437.78M | 180.03M | 355.02M |
| Investing Cash Flow | -293.34M | -285.50M | -303.75M | -381.27M | -305.86M | -331.95M |
| Financing Cash Flow | -174.28M | -167.43M | -180.72M | -41.72M | 129.93M | 10.56M |
Martinrea International Technical Analysis
Positive
10.83
Price Trends
9.11
Positive
8.49
Positive
8.45
Positive
Market Momentum
0.56
Negative
74.84
Negative
88.10
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MRE, the sentiment is Positive. The current price of 10.83 is above the 20-day moving average (MA) of 9.96, above the 50-day MA of 9.11, and above the 200-day MA of 8.45, indicating a bullish trend. The MACD of 0.56 indicates Negative momentum. The RSI at 74.84 is Negative, neither overbought nor oversold. The STOCH value of 88.10 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:MRE.
Martinrea International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
62 Neutral | $805.03M | 5.65 | -4.10% | 1.85% | -8.84% | -148.15% | |
61 Neutral | $18.02B | 12.77 | -0.74% | 3.01% | 1.30% | -13.03% | |
| ― | $12.97B | 10.78 | 10.06% | 4.20% | ― | ― | |
| ― | $187.25M | 11.11 | 6.01% | 6.14% | ― | ― | |
| ― | $3.34B | 22.28 | 3.61% | 1.39% | ― | ― | |
57 Neutral | C$806.79M | ― | 20.23% | ― | -20.36% | 50.19% | |
53 Neutral | C$2.20B | ― | -26.25% | ― | 9.12% | -182.49% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:MRE
Martinrea International
10.83
0.23
2.13%
MGA
Magna International
45.99
9.15
24.84%
EXCOF
Exco Technologies
4.91
-0.65
-11.69%
LIMAF
Linamar
55.51
12.67
29.58%
TSE:ACQ
AutoCanada
34.42
19.81
135.59%
TSE:NFI
NFI Group Inc
18.40
0.21
1.15%
Martinrea International Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Martinrea International Reports Strong Q2 Results and Secures New Business Awards
Positive
Aug 12, 2025
Martinrea International Inc. reported strong financial results for the second quarter of 2025, with total sales reaching $1,275.5 million and a notable increase in margins. The company also declared a quarterly cash dividend of $0.05 per share. New business awards amounting to approximately $40 million in annualized sales were secured, reflecting Martinrea’s strategic growth and operational improvements. The company is maintaining its 2025 outlook, anticipating total sales between $4.8 to $5.1 billion, driven by operational efficiencies and innovations in machine learning.
The most recent analyst rating on (TSE:MRE) stock is a Hold with a C$11.00 price target. To see the full list of analyst forecasts on Martinrea International stock, see the TSE:MRE Stock Forecast page.
Financial Disclosures
Martinrea International to Announce Q2 Financial Results
Neutral
Aug 5, 2025
Martinrea International Inc. announced it will release its second-quarter financial results on August 12, 2025, after market close. The announcement will be followed by a conference call to discuss the results, which indicates the company’s commitment to transparency and engagement with its stakeholders.
The most recent analyst rating on (TSE:MRE) stock is a Hold with a C$11.00 price target. To see the full list of analyst forecasts on Martinrea International stock, see the TSE:MRE Stock Forecast page.
Shareholder MeetingsBusiness Operations and Strategy
Martinrea International Inc. Reports Strong Shareholder Support at Annual Meeting
Positive
Jun 12, 2025
Martinrea International Inc. held its annual general meeting where shareholders showed strong support, voting in favor of all business items, including the election of directors. The company, despite facing tariff and trade challenges, continues to perform well and maintains a positive outlook, emphasizing its sustainable competitive advantage and commitment to delivering positive results for stakeholders.
The most recent analyst rating on (TSE:MRE) stock is a Hold with a C$11.00 price target. To see the full list of analyst forecasts on Martinrea International stock, see the TSE:MRE Stock Forecast page.
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.