On May 6, 2021, Magna released its fiscal first-quarter 2021 results for the quarter ending March 2021. The Company reported an earnings-per-share (EPS) profit of $1.86 excluding non-recurring items versus consensus analyst estimates for $1.60, a $0.26 beat. Revenues rose 18% year-over-year (YoY) to $10.2 billion beating analyst estimates for $9.69 billion. Global light productions rose 18% driven by a 87% increase in China. Adjusted EBIT was up 91% and income from operations before income taxes rose 109% YoY. The global chip shortage negatively impacted global light vehicle production. The Company generated $1.03 billion. The Company repurchased 1.7 million shares or $150 million in the quarter and declared its first dividend of $0.43 per common share. The Company issued in-line guidance for full-year 2021 with revenues coming in between $40.2 billion to $41.8 billion, up from $40 billion to $41.6 billion.
Magna’s new CEO, Swamy Kotagiri, set the tone:
CEO Kotagiri stated that the first half of 2021 is seeing a recovery in global vehicle demand and auto production. The vehicle segment mix is shifting to light trucks in both North America and Europe. The weaker US dollar is enabling a tailwind in the sales offset by the global chip shortage headwinds. They aren’t out of the woods yet:
Using the rifle charts on the monthly and weekly time frames provide a broader view of the price action playing field for MGA stock. The monthly rifle chart has been in a strong mini pup uptrend that is starting to peak out with the shooting star peak. The monthly upper Bollinger Bands (BBs) sit at $74.39 with monthly 5-period moving average (MA) is rising at the $59.82 Fibonacci (fib) level. The monthly and weekly rifles charts formed market structure low (MSL) buy triggers above $43.21 and $7.83, respectively. The weekly rifle chart peaked out at the $77.39 fib resistance causing the weekly stochastic to peak triggering a mini inverse pup under the weekly 5-period MA. The daily formed a market structure high (MSL) under the $72.35 trigger. Selling pressure on the weekly mini inverse pup can form opportunistic pullback levels at the $64.82 weekly 15-period MA/fib, $59.82 fib, $56.50 fib, $52.67 fib and the $47.89 fib. The upside trajectories range from the $80.19 to the $93.95 fib with further upside potential through $100.