MGA: Highlights from the RBC Canadian Industrials Conference

研报英文原文证据摘录

MGA: Highlights from the RBC Canadian Industrials Conference

EQUITY RESEARCH QUICK TAKE

RBC Capital Markets, LLC

Tom Narayan (Analyst)

Thomas Ito, CFA (Senior Associate)

May 19, 2026

Magna International Inc.

Highlights from the RBC Canadian Industrials Conference

NYSE: MGA | USD 59.59 | Sector Perform | Price Target USD 57.00

Sentiment: Neutral

This morning, Swami Kotagiri, CEO, and Phil Fracassa, CFO, presented at RBC's Canadian Industrials Conference.

1) Raw materials in the face of the Iran conflict. The biggest exposure is steel/aluminum but this is protected by OEM pass-through

with no lag. Resins is next where there is a ~$500M annual spend and there is a 50% pass thru coverage mechanism. Recovery

has a lag, but these can be offset with internal cost mitigation and negotiating recoveries. Most of these raw mat headwinds are

expected to be offset in the current year and what is left over could come next year. The final piece is energy which is being felt

in Europe, but now the company is much better protected than in prior years. It has 2/3 hedged.

2) 2026 Guidance H2 weighted. This year the guidance assumes 55% of the EBIT comes in H2/26 vs H1/26. Last year this ratio was

40/60 and the company was able to achieve it. Timing of recoveries is the biggest part and this tends to be backend weighted.

This tends to be seasonal. There are also operational excellence initiatives that should come in H2.

3) Portfolio rationalization. Every June/July the business units go to the management team and the rubric is can these businesses

stand alone? No difference this year. The company does benefit from being in these different business units. There are synergies

across segments. 80% of operations across segments are being done on a unified platform.