New
Why Auto Stock Magna International Fell Over 10% Today
The shares of Magna International (NYSE: MGA) plunged 11.6% this morning as panic gripped investors after President Donald Trump announced plans to impose hefty import tariffs over the weekend, including a 25% levy on imports from Canada and Mexico, with a 10% tariff on imports from China.
These markets are also some of Magna's most important markets, which may explain why the auto parts company's stock slumped today.
Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. See the 10 stocks »
And a competitor just painted a scary picture, predicting that Trump's tariffs could hit production in the North American auto industry and trigger massive layoffs. Ouch.
Magna's competitor fears the worse under Trump
Magna International is headquartered in Ontario and is among the largest publicly traded auto parts companies in Canada. Its financial reports show that Mexico, Canada, and China are among Magna's top five largest end markets outside the U.S. In 2023, the three markets combined accounted for nearly 34% of Magna's total sales.
In an interview with The Globe and Mail, Linda Hasenfratz, the CEO of Canada-based Linamar, said Trump's tariffs will be borne by customers and will therefore make vehicles so costly that it could hit demand hard. That could grind North American vehicle production to a halt and trigger millions of layoffs in the industry, she said. Linamar is among Canada's top automotive parts supplier with extensive operations in North America.
Should you sell Magna stock now?
Magna International stock has been in a free fall over the past year or so, with its shares now down 35% in one year, as of this writing. A global slowdown in the auto and electric vehicle (EV) industry was already hurting the company, so Trump's moves couldn't come at a worse time.
However, he has yet to impose the tariffs, and it's too early to predict how deeply they could affect Magna International. Investors should look out for management's views and outlook when its fourth-quarter earnings are released Feb. 14.
Magna reported flat sales for the nine months that ended Sept. 30, 2024, despite a challenging business environment, but it also downgraded its full-year sales guidance slightly to $42.2 billion to $43.2 billion. The company generated $42.8 billion in sales in 2023.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $311,343!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,694!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $526,758!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of February 3, 2025
Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool recommends Magna International. The Motley Fool has a disclosure policy.
