AXL - Embedded Expectations Analysis - 2020 04 06
American Axle & Manufacturing Holdings, Inc. (AXL:USA) currently trades around corporate averages relative to UAFRS-based (Uniform) earnings, with a 20.0x Uniform P/E. Even at these levels, the market has bearish expectations for the firm, and management may be concerned about capex, debt pay downs, and volumesSpecifically, management may lack confidence in their ability to maintain capex spending around 5.5% of sales, sustain reductions in interest expense resulting from debt pay downs, and their expectations for North American light vehicle production. Moreover, they may have concerns about further backlog headwinds related to lower JLR volumes for the I-PACE and about the continued integration of their MPG acquisition and the metal forming business. Furthermore, they may be exaggerating satisfaction with their e-AAM business and the revenue potential of launches in China. Finally, they may have concerns about continued production loss and inefficiencies from restarting idle production
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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