In a report released today, Christopher Van Horn from B.Riley FBR maintained a Sell rating on American Axle (AXL), with a price target of $8. The company’s shares closed on Friday at $9.38, close to its 52-week low of $8.65.
Van Horn said:
“Manufacturing (AXL) reported lower-than-expected 2Q19 revenue and profitability as volume headwinds as well as operational challenges continue to impact results. The company missed consensus revenue estimate ($1.70B vs. 1.78B) while adjusted EBITDA came in lower than we expected at $266M vs. $278.5M. We estimate that volume challenges, product change-overs, and lower pricing were the primary differences. From an operational perspective, we had modeled a tough 2019 as we think negative fixed operating leverage remains a headwinds. In addition, we are still cautious around customer launches and macro volume through 2019. While AXL is ramping up plenty of new work, the GM truck business was one of its highest-margin programs and part of that program is rolling off through 2019.”
According to TipRanks.com, Horn is a 3-star analyst with an average return of 1.0% and a 47.3% success rate. Horn covers the Consumer Goods sector, focusing on stocks such as Standard Motor Products, Cooper Tire Rubber, and Dorman Products.
American Axle has an analyst consensus of Moderate Buy, with a price target consensus of $16.
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Based on American Axle’s latest earnings release for the quarter ending June 30, the company reported a quarterly net profit of $51 million. In comparison, last year the company had a net profit of $146 million.
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American Axle & Manufacturing Holdings, Inc. engages in the manufacture, engineering, design, and validation of driveline systems and related components. It operates through the following segments: Driveline, Metal Forming, Powertrain, Casting, and Corporate.
