AXL - Embedded Expectations Analysis - 2018 07 12
American Axle & Manufacturing Holdings, Inc. (AXL:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) Earnings, with an 11.0x Uniform P/E, implying bearish expectations for the firm. Moreover, management has concerns about their recent acquisition, balance sheet, and marginsSpecifically, management may be concerned about their expectation for contribution margin from K2 and the Ram, and may be exaggerating expectations for manufacturing synergies related to the acquisition. Moreover, they might be exaggerating expectations for the P4 solution, and may have concerns about their ability to maintain gross margins going forward. Finally, they might be concerned about their ability to continue refinancing debt at favorable rates, and may lack confidence in their ability to continue using asset sales to strengthen their balance sheet
American Axle & Manufacturing Holdings is a supplier to the automotive industry. The company designs, engineers and manufactures driveline and metal forming products. The company's business is organized into Driveline and Metal Forming segments. Driveline products consist primarily of front and rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric and hybrid driveline products and systems. Metal Forming products consist primarily of axle and transmission shafts, ring and pinion gears, differential gears and assemblies, connecting rods and variable valve timing products.
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