However, even outside of its upside potential with electric vehicles, even the near-term outlook for Magna appears far rosier than its depressed multiples would have you think.Īmong the 17 sell-side research analysts covering Magna International stock, their estimates are all varying degrees of bullish. A tech company like Apple seems like an ideal fit for a company with Magna's demonstrated ambitions. The company generates over 50% of its revenue from providing the above components to auto giants Ford, General Motors, and Fiat Chrysler, making any potential assembly with a would-be competitor like Apple a difficult balancing act for the company.Fully assembling complete automobiles represents less than 10% of Magna's total sales, though reports have already linked Apple and Magna's Steyr unit to discussions presumably tied to Project Titan.Įqually interesting, Magna has repeatedly demonstrated an interest in moving deeper into full-fledged automobile manufacturing, though it has been met with resistance from its powerful automaker customers. If a relationship happens here, Magna's undervalued stock becomes all the more intriguing today. If Project Titan takes off and leads to Apple cars, and if Magna is the chosen manufacturer, ramping up would require Magna to undertake a massive expansion of its assembly scale, but Apple could finance it. In fact, Magna Steyr's potential to work with tech companies like Apple prompted on Morgan Stanley analyst to describe the firm as a possible ' Foxconn of cars' in a note to investors last May, a tag many in the industry throw around in relation to Steyr. Manysources have cited Magna's Streyr unit as the most likely place for Apple to turn to. That's where Magna International comes in, as one of the only companies to offer contract auto-manufacturing services. With slightly more than $162 billion in net cash and investments on its balance sheet, Apple could easily pay for its own plant, but it would probably also crimp margins and return on capital to an unpalatable degree. Though owning their own plants provides certain advantages for automakers, it also requires massive capital investments. However, when it gets down to assembling an automobile into a finished product, almost all of the world's largest carmakers own and operate their own assembly plants - leaving Apple in need of a partner to help bring Project Titan to market. The global supply chain of automotive-parts manufacturers remains diverse and somewhat fragmented, much like the smartphone component space.

For apple instal Titanic