Skip to main content

Market Overview

Overreaction From Brexit: RBC Capital Upgrades American Axle To Outperform

Overreaction From Brexit: RBC Capital Upgrades American Axle To Outperform

American Axle & Manufact. Holdings, Inc. (NYSE: AXL) has been down roughly 12. percent since the United Kingdom voted to exit the European Union. As only 3 percent of American Axle's sales are reliant on Europe, experts, including RBC's Joseph Spak, believe such a large drop is unwarranted.

Spak upgraded American Axle & Manufacturing from Sector Perform to Outperform after noticing the discrepancy between the company's sensitivity to the Brexit without significant exposure to Europe. The analyst decreased his price target, however, from $17.00 to $16.00 due to the instability and possible risks associated with the Brexit and lower expected U.S. demand.

"On a relative basis to the rest of our coverage, the immediate risks from Brexit appear far lower," said Spak. Much of American Axle's sales to Europe are from Jaguar-Land Rover, but the analyst believes the risk will be "manageable."

Related Link: Amgen, Incyte Well Positioned Following Brexit

At-Home Risks

The analyst noted risks domestically as well. "We recognize all the risks to the AXL story — peak earnings, declining margins, over-exposure to GM and GM trucks," said Spak. Those risks are believed to be only long term, as the analyst views General Motors Company (NYSE: GM) demand to "remain strong for a while."

At time of writing, American Axle traded at $14.38, up 4.43 percent on the day.

Latest Ratings for AXL

Mar 2021Morgan StanleyDowngradesEqual-WeightUnderweight
Mar 2021CitigroupDowngradesBuyNeutral
Mar 2021Credit SuisseMaintainsNeutral

View More Analyst Ratings for AXL
View the Latest Analyst Ratings


Related Articles (AXL + GM)

View Comments and Join the Discussion!

Posted-In: Joseph Spak RBCAnalyst Color Long Ideas Upgrades Price Target Analyst Ratings Trading Ideas Best of Benzinga

Latest Ratings

DELLMorgan StanleyMaintains120.0
CSCOMorgan StanleyMaintains57.0
SCHWCredit SuisseMaintains74.0
CGMorgan StanleyMaintains41.0
CDWMorgan StanleyMaintains190.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at