Magna (MGA) Develops Transmission for Ferrari SF90 Stradale

Magna International Inc. MGA recently announced that, in collaboration with sports car-maker, Ferarri, it has developed an innovative, next-generation dual-clutch 8-speed transmission (DCT) for the Ferrari SF90 Stradale.

Magna’s DCT powertrain technology combines light-weight, fuel-efficient technologies with highly-advanced engineering and manufacturing processes, providing a route to energy-efficient, modern mobility.

Per Magna, the state-of-the-art DCT incorporates latest technologies, like the honeycomb housing structure, which is expected to reduce vehicles’ weight by roughly 10 kg and boost torque-to-weight performance. The DCT will also help cut CO2 emissions.

Further, the Ferrari SF90 Stradale transmission will improve efficiency, weight and packaging in additional vehicle segments through technology transfer, benefiting Magna’s full line of conventional and hybrid DCTs, over the long run.

Meanwhile, Magna is also expanding its business through joint ventures and hub openings while divesting the non-core units. In first-half 2019, the company inked a framework agreement for an electric vehicle manufacturing joint venture with an affiliate of BAIC. This August, it marked the opening of a $50-million electronics manufacturing facility in Michigan, which is expected to solidify its presence in Grand Blanc Township. Further, Magna is set to acquire Wipac Czech s.r.o., in a bid to expand its engineering capabilities globally.

In the past three months, shares of Magna have underperformed the industry it belongs to. Its shares have gained 3.4% compared with the industry’s rise of 5.5%.

For 2019, Magna projects consolidated revenues of $38.7-$39.8 billion, down from the previously estimated $38.9-$41.1 billion. The company anticipates adjusted EBIT margin of 6.3-6.5%, reflecting a decline from the prior guidance of 6.6-6.9%. Its free cash flow is estimated in the $1.9-2.1 billion band despite the reduction of the consolidated sales and margins projections for 2019.

Zacks Rank and Stocks to Consider

Currently, Magna carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Auto-Tires-Trucks sector include Weichai Power Co. WEICY, Spartan Motors, Inc. SPAR and SPX Corporation SPXC. While Weichai Power flaunts a Zacks Rank #1 (Strong Buy), Spartan Motors and SPX carry a Zacks Rank of 2 (Buy), at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Weichai Power has a projected earnings growth rate of 6.11% for the current year. Its shares have gained 75.7% over the past year.

Spartan Motors has an estimated earnings growth rate of 85.42% for the ongoing year. The company’s shares have surged 157.2% in a year’s time.

SPX has an expected earnings growth rate of 23.18% for 2019. The stock has appreciated 92.3% in the past year.

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