VLEEY - American Axle: Better Near-Term Profits But Long-Term Questions Remain

• American Axle posted better fourth quarter results, in line with the outperformance of most suppliers, and growth in its small EV revenue backlog.
• The company has partnered with China's Inovance Auto to provide 3-in-1 e-drives, leveraging Inovance's capabilities in power electronics and AXL's capabilities in gearboxes.
• Management has done a good job of taking costs out of the business, and capex needs should be relatively modest over the next three to five years.
• The long-term competitiveness of AXL in vehicle electrification remains my primary concern. While there's a case for AXL trading to the mid-teens or higher, I'm not sold on the long-term viability of the model.

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