Canada's Magna beats Q3 adjusted EPS estimates, raises FY free-cash-flow forecast

Overview

• Canada automotive supplier's Q3 sales fell 4% but slightly beat analyst expectations

• Adjusted EPS for Q3 rose 38% and beat analyst expectations

• Company approved new share buyback for up to 10% of public float

Outlook

• Magna sees 2026 sales of $41.2-$42.0 bln, down from previous $41.3-$42.5 bln outlook

• Company reaffirms midpoint of 2026 adjusted EPS outlook at $6.85-$7.15

• Magna raises 2026 free cash flow outlook to $1.85-$1.90 bln from $1.75-$1.85 bln

Result Drivers

• PRODUCTIVITY IMPROVEMENTS - Co said operational excellence initiatives and prior restructuring actions contributed to higher Adjusted EBIT and margins

• COMMERCIAL ITEMS - Net favourable commercial items helped boost Adjusted EBIT in Q3

• TARIFF RECOVERIES - Recoveries for tariffs and lower tariff costs incurred supported earnings growth

• LOWER VEHICLE PRODUCTION - Co said Q3 sales decline was mainly due to lower light vehicle production in North America and China, divestitures, and program end

Company press release:

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 3 "strong buy" or "buy", 8 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the auto, truck & motorcycle parts peer group is "buy."

• The stock recently traded at 8 times the next 12-month earnings vs. a P/E of 9 three months ago

Reuters Recommended Reads

• Oct 28 - Ford Q3 revenue beats analyst estimates

• Oct 29 - BorgWarner beats Q3 adjusted EPS estimates, lifts 2026 outlook

• Oct 29 - Garrett Motion Q3 sales rise on commercial vehicle demand

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)