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Martinrea International Inc. (TSE:MRE)
:MRE
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Martinrea International
(OTC:MRE)60Neutral
Positive Factors
Financial Performance
Free cash flow excluding lease payments is expected to be at or above the high end of the guidance range, indicating positive cash management.
Negative Factors
Industry Growth
Flat industry production in North America is expected in 2025, which could limit Martinrea International Inc.'s growth.
Market Performance
Analyst is downgrading Martinrea International Inc. to Market Perform from Outperform, indicating less confidence in the stock's potential.
Martinrea International (MRE) vs. S&P 500 (SPY)
Market Cap
C$566.01M
Dividend Yield2.7%
Average Volume (3M)139.07K
Price to Earnings (P/E)5.9
Beta (1Y)1.26
Revenue Growth-3.36%
EPS Growth-46.97%
CountryCA
Employees19,000
SectorConsumer Cyclical
Sector Strength53
IndustryVehicles
Share Statistics
EPS (TTM)1.31
Shares Outstanding73,987,850
10 Day Avg. Volume170,842
30 Day Avg. Volume139,074
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.11
Price to Cash Flow (P/CF)1.10
P/FCF Ratio2.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$11.20Price Target Upside46.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Martinrea International Business Overview & Revenue Model
Company DescriptionMartinrea International Inc. is a leading global automotive supplier, specializing in the design, engineering, and manufacturing of lightweight structures and propulsion systems. The company operates primarily in the automotive sector, providing a range of products including metal parts, assemblies, modules, complex fluid management systems, and aluminum products to automotive original equipment manufacturers (OEMs) and other industrial sectors.
How the Company Makes MoneyMartinrea International makes money through the production and sale of its automotive components and systems. Its key revenue streams include the manufacturing and supply of metal forming and aluminum products, which are integral to vehicle structures and systems. The company partners with major automotive manufacturers, supplying them with essential components that contribute to vehicle design and functionality. Martinrea also generates revenue through innovation in lightweight and efficient automotive solutions, which are in high demand as the industry shifts towards more sustainable and fuel-efficient vehicles. Additionally, the company's focus on maintaining strong relationships with OEMs and expanding its global manufacturing footprint supports its financial performance.
Martinrea International Financial Statement Overview
Summary
Martinrea International is facing profitability challenges due to increased costs and high leverage. Despite a moderate recovery in revenue, the company reported negative net income, impacting the return on equity. However, the balance sheet remains stable with consistent equity, and cash flows are managed effectively. Overall, financial health needs improvement to address profitability issues.Income Statement
The income statement shows a decline in profitability, with the gross profit and net profit margins contracting over the year. The net income turned negative, indicating a loss, which is a concern. However, the revenue saw a moderate recovery from the previous year, signaling potential for growth if cost controls can be improved.55
Neutral
Balance Sheet
The balance sheet reflects a stable equity position with a consistent equity ratio, although the debt-to-equity ratio remains relatively high, indicating significant leverage. The return on equity has decreased due to negative net income, reducing overall shareholder returns.60
Neutral
Cash Flow
Cash flow analysis reveals effective cash management with positive operating cash flow, though free cash flow has decreased significantly. The free cash flow to net income ratio is not meaningful due to negative net income, indicating challenges in translating operational success into profitability.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.01B | 5.34B | 4.76B | 3.78B | 3.38B | Gross Profit |
| 648.56M | 675.40M | 559.26M | 345.62M | 415.10M | EBIT |
| 124.61M | 269.11M | 217.78M | 62.92M | 120.15M | EBITDA |
| 475.17M | 601.48M | 516.59M | 332.32M | 263.75M | Net Income Common Stockholders |
| -34.55M | 153.66M | 132.84M | 35.88M | -27.32M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 167.95M | 186.80M | 161.66M | 153.29M | 152.79M | Total Assets |
| 3.82B | 3.99B | 4.14B | 3.61B | 3.37B | Total Debt |
| 1.22B | 1.23B | 1.34B | 1.25B | 1.05B | Net Debt |
| 1.06B | 1.04B | 1.18B | 1.10B | 894.25M | Total Liabilities |
| 2.35B | 2.52B | 2.77B | 2.44B | 2.19B | Stockholders Equity |
| 1.47B | 1.47B | 1.38B | 1.17B | 1.18B |
| Cash Flow | Free Cash Flow | |||
| 150.54M | 207.57M | 53.96M | -118.73M | 54.13M | Operating Cash Flow |
| 433.29M | 511.09M | 437.78M | 180.03M | 355.02M | Investing Cash Flow |
| -285.50M | -303.75M | -381.27M | -305.86M | -331.95M | Financing Cash Flow |
| -167.43M | -180.72M | -41.72M | 129.93M | 10.56M |
Martinrea International Technical Analysis
Negative
7.65
Price Trends
8.62
Negative
9.42
Negative
10.35
Negative
Market Momentum
-0.26
Positive
21.36
Positive
33.19
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:MRE, the sentiment is Negative. The current price of 7.65 is below the 20-day moving average (MA) of 8.21, below the 50-day MA of 8.62, and below the 200-day MA of 10.35, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 21.36 is Positive, neither overbought nor oversold. The STOCH value of 33.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:MRE.
Martinrea International Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $3.23B | 12.68 | 4.98% | 1.99% | 14.14% | 21.46% | |
74 Outperform | C$11.35B | ― | -5.31% | ― | 1.44% | -183.14% | |
71 Outperform | C$15.55B | 11.34 | 8.62% | 5.04% | 2.72% | 5.00% | |
67 Neutral | $238.71M | 8.50 | 7.46% | 7.12% | -1.93% | 3.61% | |
60 Neutral | C$566.01M | 5.92 | 6.57% | 2.70% | -3.36% | -46.97% | |
60 Neutral | $13.01B | 10.45 | 0.79% | 3.53% | 1.60% | -22.47% | |
59 Neutral | C$1.34B | ― | -3.46% | ― | 20.56% | 94.32% |
* Consumer Cyclical Sector Average
Performance Comparison
TSE:MRE
Martinrea International
7.65
-3.71
-32.65%
TSE:CAE
CAE
35.49
9.09
34.43%
TSE:LNR
Linamar
52.05
-16.90
-24.51%
TSE:MG
Magna International
55.20
-14.52
-20.82%
TSE:XTC
Exco Technologies
6.20
-0.85
-12.11%
TSE:NFI
NFI Group Inc
10.53
-1.15
-9.85%
Martinrea International Earnings Call Summary
Earnings Call Date: Mar 6, 2025 | % Change Since: -3.41% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong operational performance and free cash flow generation despite challenges such as revenue decline and weak EV volumes. The company is focused on operational efficiency and capital return to shareholders. However, geopolitical tensions and impairment charges pose significant challenges.Highlights
Safety Performance
Achieved a total recordable injury rate (TRIF) of 0.99, among the best in the industry for 2024.
Strong EBITDA Margin
Despite sales headwinds, the company's EBITDA margin percentage increased in 2024 compared to the previous year.
Capital Return to Shareholders
Repurchased over 5 million shares and maintained dividends, enhancing shareholder value.
Carbon Emissions Reduction
Reduced carbon emissions by 17% since 2019, progressing towards a 35% reduction goal by 2035.
Operational Improvements
Implemented advanced manufacturing technologies and machine learning to improve line performance and efficiency.
Free Cash Flow Generation
Generated free cash flow of $183.8 million in 2024, close to the record high of 2023.
Lowlights
Decline in Revenues
Revenues were down slightly in 2024 due to sales headwinds, totaling just over $5 billion.
EV Segment Challenges
EV volumes were weak, with some programs running below 20% of expected volumes, leading to asset roll-downs.
Impairment Charges
Recorded a non-cash impairment charge of $129 million in Q4, primarily related to EV asset write-downs.
Geopolitical and Trade Challenges
Facing uncertainties due to geopolitical tensions and tariff negotiations affecting the auto industry.
Higher Effective Tax Rate
Experienced an unusually high effective tax rate due to foreign currency fluctuations, impacting adjusted EPS.
Company Guidance
In the recent conference call, Martinrea provided detailed guidance on various financial metrics for 2025, despite the challenges faced in 2024. The company reported total revenues of just over $5 billion for 2024, with an adjusted EBITDA of $131.7 million in Q4, while maintaining a strong balance sheet with a net debt to adjusted EBITDA ratio under 1.5x. For 2025, Martinrea expects total sales to be between $4.8 billion and $5.1 billion and aims for an adjusted operating income margin of 5.3% to 5.8%. The company also projects strong free cash flow of $125 million to $175 million, excluding lease payments. Martinrea plans to reduce annual SG&A expenses by approximately $50 million over the next 12 to 18 months, while continuing to focus on operational improvements and strategic investments. The company remains committed to a balanced capital allocation strategy, including investments in the business, debt reduction, and prudent share buybacks.Martinrea International Corporate Events
Financial Disclosures
Martinrea International to Release Q4 and Full Year 2024 Financial Results
Neutral
Feb 27, 2025
Martinrea International Inc. announced that it will release its fourth quarter and full year financial results for 2024 on March 6, 2025, after market close. The announcement will be followed by a conference call to discuss the results, which will be accessible via phone and webcast, indicating the company’s commitment to transparency and stakeholder engagement.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.