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Martinrea International Inc. (TSE:MRE)
:MRE
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Martinrea International
(OTC:MRE)
Rating:66Neutral
Price Target:
C$8.50
▲(1.43%Upside)
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
Analyst Downgrade
Analyst is downgrading Martinrea International Inc. to Market Perform from Outperform, indicating less confidence in the stock's potential.
Industry Production
Flat industry production in North America is expected in 2025, which could limit Martinrea International Inc.'s growth.
Market Performance
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
C$609.96M
Dividend Yield2.35%
Average Volume (3M)209.91K
Price to Earnings (P/E)5.7
Beta (1Y)1.12
Revenue Growth-9.36%
EPS Growth-145.18%
CountryCA
Employees17,000
SectorConsumer Cyclical
Sector Strength63
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.41
Shares Outstanding72,787,850
10 Day Avg. Volume334,067
30 Day Avg. Volume209,915
Financial Highlights & Ratios
PEG Ratio0.13
Price to Book (P/B)0.36
Price to Sales (P/S)0.00
P/FCF Ratio3.93
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$10.68Price Target Upside27.48% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
Martinrea International Business Overview & Revenue Model
Company DescriptionMartinrea International Inc. is a leading Canadian automotive supplier, headquartered in Vaughan, Ontario. The company operates in the automotive and industrial sectors, specializing in the production of quality metal parts, assemblies, and modules, as well as fluid management systems and aluminum products. Martinrea serves a global clientele, largely consisting of major automotive manufacturers, by providing innovative and efficient solutions that meet the ever-evolving demands of the industry.
How the Company Makes MoneyMartinrea International generates revenue primarily through the manufacture and sale of automotive parts and assemblies. Its key revenue streams include the production of lightweight structures, chassis, suspension systems, and fluid management products, which are integral components for vehicles. The company partners with major automotive original equipment manufacturers (OEMs), securing long-term contracts that provide a steady stream of income. Additionally, Martinrea invests in research and development to innovate and enhance its product offerings, ensuring it remains competitive and meets the stringent requirements of its clients. Factors such as advancements in automotive technology, fuel efficiency demands, and global expansion efforts also contribute to its earnings.
Martinrea International Earnings Call Summary
Earnings Call Date:May 01, 2025
(Q1-2025)
| % Change Since: 13.86%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of improvements in financial results and new business awards against significant challenges from U.S. tariffs, losses in European operations, and negative free cash flow. The positive steps in cost management and new business are counterbalanced by concerns over tariffs and declines in key financial metrics.Q1-2025 Updates
Positive Updates
Improved Q1 Financial Results
Q1 financial results improved over Q4 with higher production sales and better margins. Inventories are now at normal levels, and volumes improved compared to Q4.
New Business Awards
Awarded new business worth $60 million in annualized sales, with $55 million in structural components with Mercedes and General Motors and $5 million with Volvo Truck.
SG&A Cost Reduction Initiative
Announced a project targeting $50 million in annual cost improvement through SG&A cost reductions, generating free cash flow, and maintaining a strong balance sheet.
Negative Updates
Impact of U.S. Tariffs
U.S. tariffs on automotive imports are clouding the business outlook. Tariffs have led to OEMs announcing temporary shutdowns and volume reductions. The direct impact has been manageable but could accelerate.
European Market Challenges
Adjusted operating income in Europe was a loss again this quarter, though improved from Q4. The region still faces weak production volumes, especially on EV programs, and a higher cost structure.
Negative Free Cash Flow
Free cash flow before IFRS 16 lease payments was negative $25.4 million, compared to negative $1.4 million in Q1 2024, primarily due to lower EBITDA.
Adjusted EBITDA and Operating Income Decline
Adjusted EBITDA was $140.9 million, down from $162.8 million in Q1 2024. Adjusted operating income was $61.9 million, down from $79.1 million in Q1 2024.
Decreased Adjusted EPS
Adjusted net earnings per share came in at $0.41, down from $0.62 in Q1 2024, due to decreased operating income, a net foreign exchange loss, and a higher effective tax rate.
Company Guidance
During the Martinrea International First Quarter 2025 Results Conference Call, the company provided several key metrics and guidance updates. They reported an adjusted EBITDA of $140.9 million, down from $162.8 million in Q1 2024, and an adjusted operating income of $61.9 million, down from $79.1 million year-over-year, with production sales declining by about 10%. The adjusted operating income margin was 5.3%, a decrease of 70 basis points, reflecting a 13% decremental margin on lower production sales. The company projected sales for 2025 to be between $4.8 billion and $5.1 billion, with an adjusted operating income margin of 5.3% to 5.8%, and free cash flow of $125 million to $175 million. The outlook does not include potential impacts from tariffs on auto parts, which remain a concern due to ongoing geopolitical and trade uncertainties. Martinrea also highlighted a $50 million annual cost improvement target from its SG&A reduction project, and new business awards totaling $60 million in annualized sales of mature volumes. The company decided to temporarily pause share buybacks until there is more clarity on the tariff situation, focusing on maintaining a strong balance sheet and using free cash flow to pay down debt.Martinrea International Financial Statement Overview
Summary
Martinrea International's financial performance shows operational efficiency with positive EBIT and EBITDA margins. However, challenges like negative net income, declining revenue, and shrinking stockholders' equity and assets impair financial stability. Cash flow management is efficient, but declining free cash flow raises risks.Income Statement
The company has shown a volatile performance with revenue fluctuations. The gross profit margin is positive at approximately 12.8% TTM but has decreased from previous years. The net profit margin is negative TTM, indicating losses, which is a concern. Revenue growth has been inconsistent, with a decline most recently TTM. The EBIT and EBITDA margins are positive, which suggests some level of operational efficiency, though EBIT margin has declined.65
Positive
Balance Sheet
The balance sheet reflects a moderate debt-to-equity ratio around 0.85, showing manageable leverage. The equity ratio is around 38% TTM, indicating a stable capital structure. However, a decrease in stockholders' equity and assets over the periods is a concern. Return on equity has turned negative TTM, driven by net losses.70
Positive
Cash Flow
The cash flow statement shows a decline in free cash flow from the previous year, with a negative growth rate. The operating cash flow to net income ratio is positive, indicating operational cash efficiency despite net losses. However, the negative free cash flow to net income ratio highlights challenges in generating cash relative to earnings.68
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 4.86B | 5.01B | 5.34B | 4.76B | 3.78B | 3.38B | Gross Profit |
| 620.84M | 648.56M | 675.40M | 559.26M | 345.62M | 415.10M | EBIT |
| 103.25M | 124.61M | 269.11M | 217.78M | 62.92M | 120.15M | EBITDA |
| 436.41M | 475.17M | 601.48M | 516.59M | 332.32M | 263.75M | Net Income Common Stockholders |
| -60.72M | -34.55M | 153.66M | 132.84M | 35.88M | -27.32M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 148.55M | 167.95M | 186.80M | 161.66M | 153.29M | 152.79M | Total Assets |
| 3.90B | 3.82B | 3.99B | 4.14B | 3.61B | 3.37B | Total Debt |
| 1.26B | 1.22B | 1.23B | 1.34B | 1.25B | 1.05B | Net Debt |
| 1.11B | 1.06B | 1.04B | 1.18B | 1.10B | 894.25M | Total Liabilities |
| 2.42B | 2.35B | 2.52B | 2.77B | 2.44B | 2.19B | Stockholders Equity |
| 1.48B | 1.47B | 1.47B | 1.38B | 1.17B | 1.18B |
| Cash Flow | Free Cash Flow | ||||
| 135.33M | 150.54M | 207.57M | 53.96M | -118.73M | 54.13M | Operating Cash Flow |
| 422.65M | 433.29M | 511.09M | 437.78M | 180.03M | 355.02M | Investing Cash Flow |
| -283.94M | -285.50M | -303.75M | -381.27M | -305.86M | -331.95M | Financing Cash Flow |
| -164.42M | -167.43M | -180.72M | -41.72M | 129.93M | 10.56M |
Martinrea International Technical Analysis
Positive
8.38
Price Trends
7.48
Positive
7.86
Positive
9.11
Negative
Market Momentum
0.23
Positive
57.56
Neutral
58.91
Neutral
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 8.38 is above the 20-day moving average (MA) of 8.20, above the 50-day MA of 7.48, and below the 200-day MA of 9.11, indicating a neutral trend. The MACD of 0.23 indicates Positive momentum. The RSI at 57.56 is Neutral, neither overbought nor oversold. The STOCH value of 58.91 is Neutral, 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | C$255.55M | 9.68 | 6.86% | 6.17% | -2.84% | -8.22% | |
73 Outperform | $14.13B | 9.08 | 9.85% | 5.25% | 0.36% | 15.87% | |
71 Outperform | C$3.72B | 14.73 | 4.66% | 1.65% | 2.26% | -54.00% | |
66 Neutral | C$609.96M | 5.65 | -3.98% | 2.35% | -9.36% | -145.18% | |
63 Neutral | C$530.14M | ― | 9.31% | ― | -18.16% | -275.09% | |
62 Neutral | $6.88B | 11.32 | 2.95% | 3.87% | 2.70% | -24.57% | |
59 Neutral | C$1.83B | ― | -0.03% | ― | 15.99% | 99.83% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:MRE
Martinrea International
8.38
-3.47
-29.31%
TSE:LNR
Linamar
62.14
-6.33
-9.25%
TSE:MG
Magna International
50.15
-7.04
-12.32%
TSE:XTC
Exco Technologies
6.67
-0.88
-11.66%
TSE:NFI
NFI Group Inc
15.38
-1.15
-6.96%
TSE:ACQ
AutoCanada
22.72
2.25
10.99%
Martinrea International Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Martinrea International Reports Strong Q1 Results and New Business Wins
Positive
May 1, 2025
Martinrea International Inc. reported improved financial results for the first quarter of 2025, with total sales reaching $1,168.2 million and a notable improvement in adjusted operating income margin to 5.3%. The company declared a quarterly cash dividend of $0.05 per share and announced new business awards totaling approximately $60 million in annualized sales. Despite challenges such as U.S. tariffs on automotive imports and weak demand for EV platforms, Martinrea is focusing on operational improvements, cost reductions, and maintaining a strong balance sheet to navigate the current market conditions.
Business Operations and StrategyFinancial Disclosures
Martinrea International Reports Strong Q1 2025 Results Amid Industry Challenges
Positive
May 1, 2025
Martinrea International Inc. reported improved financial results for the first quarter of 2025, with total sales reaching $1,168.2 million and an increase in adjusted operating income margin to 5.3%. Despite challenges from U.S. tariffs and weak demand for EV platforms, the company secured new business awards totaling $60 million in annualized sales, demonstrating resilience and strategic focus on operational improvements and cost reductions.
Financial Disclosures
Martinrea International to Release Q1 2025 Financial Results on May 1
Neutral
Apr 24, 2025
Martinrea International Inc. announced it will release its first-quarter financial results for 2025 on May 1, after market close, followed by a conference call to discuss the results. This announcement is crucial for stakeholders as it provides insights into the company’s financial health and operational performance in the automotive industry, potentially impacting investor decisions and market positioning.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.