Market Overview

BofA: Lyft, Magna Could Be The First Of Many Autonomous Vehicle Partnerships

Share:
BofA: Lyft, Magna Could Be The First Of Many Autonomous Vehicle Partnerships
Related MGA
Earnings Scheduled For November 8, 2018
Jim Cramer Weighs In On Arch Coal, AbbVie And More
55 Firms Going Ex-Dividend Next Week, Including Valero, Target And Prudential (TalkMarkets)

Magna International Inc. (USA) (NYSE: MGA) announced a multiyear partnership with Lyft this week — and a $200-million investment in the ride-hailing service — to develop and manufacture self-driving systems at scale.

The strategy puts the companies on pace to commercialize and deploy autonomous vehicle tech alongside competitors, a feat expected to entice additional Magna collaborators.

The Rating

Bank of America Merrill Lynch analyst John Murphy reiterated a Buy rating on Magna with a $67 price target.

The Thesis

By BofA's assessment, Magna boasts the manufacturing capabilities lacking in most auto companies that are attempting to scale AV products, Murphy said in a note. (See the analyst's track record here.) 

“We believe MGA’s exposure and expertise in numerous automotive component systems, as well as complete vehicle assembly, provides it with a unique understanding and position as a Tier 1 supplier," the analyst said. 

The complete vehicle assembly business, in particular, is expected to draw manufacturing contracts from traditional automakers, nascent industry contributors like Tesla Inc (NASDAQ: TSLA), Apple Inc. (NASDAQ: AAPL) or Alphabet Inc. (NASDAQ: GOOGL) (NASDAQ: GOOG), and mobility services operators like Uber.

This opportunity — coupled with expansion in China, growth in the transmission manufacturer Getrag, a ramping of the Austrian manufacturing arm Magna Steyr and continued consolidation among auto suppliers — is seen to boost the Magna's top-line growth.

“MGA is one of the best-positioned suppliers over the long run, in our view, as its solid proprietary technology, expertise of the complete vehicle, and reputation among OEMs as a trusted global partner should allow the company to continue to win business and grow revenues in excess of market growth,” Murphy said. 

Price Action

Magna shares were down 1.52 percent after the open Friday. 

Related Links:

Nvidia Partners With Continental On AI Self-Driving Cars

Nvidia To Partner With Volkswagen, Uber For Self-Driving Car Technology

Photo courtesy of Magna. 

Latest Ratings for MGA

DateFirmActionFromTo
Oct 2018CitigroupMaintainsBuyBuy
Aug 2018Morgan StanleyMaintainsUnderweightUnderweight
Aug 2018CitigroupMaintainsBuyBuy

View More Analyst Ratings for MGA
View the Latest Analyst Ratings

Posted-In: autonomous vehicles AutonomyAnalyst Color Price Target Reiteration Top Stories Analyst Ratings Tech Best of Benzinga

 

Related Articles (AAPL + GOOG)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
LXFTKeyBancDowngrades0.0
CPAImperial CapitalDowngrades68.0
PRMWImperial CapitalInitiates Coverage On18.0
TGTKeyBancInitiates Coverage On110.0
QCOMMorgan StanleyUpgrades0.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Quadruple Witching And Housing Data Take Center Stage Heading Into Weekend

5 Biggest Price Target Changes For Friday