Magna International Inc. (MGA): A Bull Case Theory 

We came across a bullish thesis on Magna International Inc. on Beat the TSX (BTSX-20)’s Substack by Beat the TSX-27 Strategy. In this article, we will summarize the bulls’ thesis on MGA. Magna International Inc.’s share was trading at $49.32 as of December 2nd. MGA’s trailing and forward P/E were 13.50 and 8.06 respectively according to Yahoo Finance.

Magna International Inc. manufactures and supplies vehicle engineering, contract, and automotive space. MGA delivered a solid Q3/25, with adjusted EPS of $1.33 versus $1.28 in Q3/24 and revenue of $10.5 billion, up 2% year-over-year, supported by stable global light-vehicle production and favorable FX. EBIT margin expanded to 5.9%, reflecting disciplined cost management, restructuring initiatives, and improved contract economics, while EBITDA reached $1.0 billion. Management raised 2025 guidance, with mid-point EPS now $5.34 and revenue expected at $41.6 billion, reflecting modest growth alongside margin expansion to the upper end of prior targets.

Free cash flow guidance was also lifted to $1.1 billion from $900 million, underscoring the company’s capacity to generate steady cash. Leverage has declined to 1.5×, creating flexibility for future share buybacks and dividend increases, particularly as the renewed NCIB—paused since Liberation Day—can now be deployed. Operational consistency across divisions, effective navigation of tariffs, and disciplined execution highlight the resilience of Magna’s industrial business model, especially in a cyclical environment.

While the stock currently trades with a forward yield of 4.29% versus a five-year average of 3.13%, the company’s strong free cash flow, margin expansion, and guidance upgrades support a positive outlook. The combination of financial discipline, predictable cash generation, and strategic capital allocation makes Magna a compelling long-term holding, with a cautious approach to buying on dips for additional exposure. Overall, Magna demonstrates that steady execution and operational rigor can drive value in a cyclical industry, offering investors a well-compounding, resilient business with limited downside and potential upside through capital returns and sustained margin improvement.

Previously we covered a bullish thesis on Gentex Corporation (NASDAQ:GNTX) by The Antifragile Investor in January 2025, highlighting its leadership in automotive technology, innovative mirrors, diversification, and strong financials. The stock has depreciated approximately 17.61% since our coverage due to market pressures. The thesis still stands as Gentex continues to innovate. Beat the TSX-27 Strategy shares a similar but emphasizes Magna’s operational execution and cash generation.

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Disclosure: None.