After driving higher in February, shares of Magna International (MGA -0.22%) shifted into reverse and headed in the opposite direction. The auto supplier proceeded to end the month 13.4% lower, according to data from S&P Global Market Intelligence.
There appear to have been three bumps in the road for Magna last month: the suspension of operations in Russia, an analyst's downgrade of the stock, and the loss of a key executive to another company.
It didn't take long after March began for investors to sour on Magna's stock. On March 4, Magna announced that it would suspend operations at its plants in Russia due to the war in Ukraine. According to a filing with the SEC, Magna operates six production facilities in Russia, primarily focused on producing parts for Volkswagen and Hyundai. In 2021, these six facilities generated sales of about $370 million.
Magna International found itself on an analyst's radar early in the month. On March 7, Peter Sklar, an analyst at BMO Capital, downgraded the stock to market perform from outperform, cutting his price target to $63 from $89. According to Thefly.com, Sklar cited several concerns that led him to turn more bearish on the stock: the ongoing conflict in Ukraine, rising energy prices, and a decrease in vehicle production in Western Europe.
Unnerved with Sklar's revised outlook on the stock, investors motored out of their positions, leading the stock to close 8% lower than where it had ended the day before the analyst's downgrade. Investors were likely sensitive to Sklar's outlook considering that it was significantly lower than the $92 price target that Benchmark had set earlier in February.
The second catalyst for the stock's fall last month came when investors learned of a major change to the company's C-suite. On March 14, Rivian (RIVN -2.28%) announced that it had hired Frank Klein to be the company's new chief operating officer (COO). Prior to stepping into the role of COO at Rivian, Klein had served as president of Magna Steyr (a subsidiary of Magna International) where he helped with the company's transition to the manufacturing of electric vehicles.
Considering the company's suspension of operations in Russia, the analyst's downgrade, and the loss of a key executive, the sell-off in Magna's stock last month is hardly surprising. Moreover, it wouldn't be a shock if Magna tumbles even more in the near future. Wall Street continues to remain bearish on the stock. This week, for example, Morgan Stanley dropped its price target to $90 from $95, and Barclays lowered its price target to $68 from $72.