Zacks Investment Research downgraded shares of Magna International, Inc. (MGA) from OUTPERFORM to NEUTRAL on November 12, 2012, with a target price of $47.00.
Magna International expects to grow based on significant acquisitions and expansions. Further, it expects to benefit from increased customer preferences for light passenger vehicles and stricter regulation formulated by the U.S. government. In the third quarter of 2012, the company posted a 20.2% rise in profits and outdid the Zacks Consensus Estimate by $0.10 per share. However, we are concerned about import of parts from low-cost countries and rising raw material costs. Moreover, the company's debt burden is rising. As a result, we have downgraded the recommendation on the shares of the company to Neutral from Outperform and set a target price of $47.00.
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