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Investing.com - Stifel maintained its Hold rating and $7.00 price target on American Axle & Manufacturing Holdings (NYSE:AXL) Monday, citing positive implications from recent General Motors and Ford quarterly results.
The research firm noted that GM and Ford reported third-quarter 2025 revenue above expectations, with internal combustion engine (ICE) vehicles and North American demand outperforming forecasts.
This performance is particularly relevant for American Axle as GM represents 42% of the company’s 2024 sales, while Ford accounts for 13%, according to Stifel’s analysis.
The firm highlighted American Axle’s geographic concentration, with North America comprising 73% of its sales, making U.S. market performance especially significant for the auto parts manufacturer.
Stifel indicated that stronger-than-anticipated sales at GM and Ford, particularly at GM, suggest American Axle is likely trending toward the upper end of its full-year guidance range due to its concentrated customer base.
In other recent news, American Axle & Manufacturing Holdings has announced plans to raise $1.4 billion in notes to finance its pending acquisition of Dowlais Group plc. This financing includes $843 million in senior secured notes due 2032 and $600 million in senior unsecured notes due 2033. The acquisition has led S&P Global Ratings to revise its outlook on American Axle to negative, citing integration risks and cash flow concerns, with expectations of increased leverage. Despite these concerns, RBC Capital has upgraded American Axle’s stock rating to Outperform, raising its price target to $8.00, based on the anticipated synergies from the Dowlais deal. Stifel has also adjusted its price target for American Axle to $7.00, describing the acquisition as "transformational." The transaction is expected to generate $300 million in annual cost synergies by the end of the third year, although these savings will cost the same amount to implement. Overall, these developments highlight significant financial maneuvers and strategic shifts for American Axle in the wake of its acquisition plans.
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