2023-04-19 07:55:34 ET
Magna International ( NYSE: MGA ) was cut to Sector Perform from Outperform at RBC on Wednesday given the expectation of a long road ahead for margin recovery.
Equity analyst Tom Narayan told clients that he sees “limited upside over a forecast period” as a rebound for revenue may take time to materialize, as will margins. Additionally, interest payments are growing more expensive, adding pressure on the business.
“We move to the sidelines, as we believe more meaningful margin and FCF improvements may not occur until 2025+ as the company accelerates investment in its core growth initiatives,” Narayan wrote.
Narayan moved his price target to $52 from $58 alongside the downgrade. Shares of Magna ( MGA ) dipped about 2% before the bell on Wednesday.
Read more on the company’s most recent earnings release .
For further details see:
Magna International stock cut to Hold as RBC sees ‘limited upside’ ahead