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1. Company Snapshot

1.a. Company Description

American Axle & Manufacturing Holdings, Inc., together with its subsidiaries, designs, engineers, and manufactures driveline and metal forming technologies that supports electric, hybrid, and internal combustion vehicles in the United States, Mexico, South America, China, other Asian countries, and Europe.It operates through Driveline and Metal Forming segments.The Driveline segment offers front and rear axles, driveshafts, differential assemblies, clutch modules, balance shaft systems, disconnecting driveline technology, and electric and hybrid driveline products and systems for light trucks, sport utility vehicles, crossover vehicles, passenger cars, and commercial vehicles.


The Metal Forming segment provides axle and transmission shafts, ring and pinion gears, differential gears and assemblies, and connecting rods and variable valve timing products for original equipment manufacturers and tier 1 automotive suppliers.American Axle & Manufacturing Holdings, Inc.has technology development agreement with Suzhou Inovance Automotive Ltd.


and REE Automotive Ltd.American Axle & Manufacturing Holdings, Inc.was founded in 1994 and is headquartered in Detroit, Michigan.

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1.b. Last Insights on AXL

American Axle & Manufacturing Holdings, Inc.'s recent performance was driven by strong Q2 2025 earnings, with net income of $39.3 million and adjusted EBITDA of $202.2 million. The company's quarterly earnings of $0.21 per share beat the Zacks Consensus Estimate. AAM's year-over-year Adjusted EBITDA margin growth was driven by productivity and cost controls. The company also announced a recommended cash and share combination with Dowlais Group PLC, which received unconditional clearance from the European Commission. Additionally, AAM's technical chart showed a "golden cross" signal.

1.c. Company Highlights

2. AAM's Q3 2025 Earnings: A Strong Upside Surprise

AAM reported a robust third quarter 2025, with sales of $1.51 billion and adjusted earnings per share of $0.16, significantly beating estimates of $0.12. The company's adjusted EBITDA margin expanded by 130 basis points to 12.9%, driven by a favorable product mix and cost efficiencies. Operating cash flow was $143.3 million, and adjusted free cash flow was approximately $98.1 million.

Publication Date: Nov -16

📋 Highlights
  • Profitability surge: Adjusted EBITDA reached $195M (12.9% of sales), a 130 bps improvement YoY, with driveline margins hitting 14.9% (highest since 2020).
  • Free cash flow strength: Adjusted free cash flow of $98.1M in Q3, with full-year guidance of $180M–$210M and CapEx at 5% of sales.
  • ICE demand boost: OEMs prioritizing ICE over EV post-U.S. tax credit discontinuation, aligning with AAM’s asset base and core product strengths.
  • Dowlais synergy progress: $300M synergy target confirmed, with pro forma net leverage neutral post-acquisition and 2025 EBITDA guidance raised to $710M–$745M.

Operational Highlights

The driveline business unit achieved adjusted EBITDA margins of 14.9%, the highest third quarter margin since 2020, driven by strong demand for Ram trucks, a key franchise product. AAM is also seeing onshoring opportunities within its metal forming group and continues to assess its footprint to optimize and support customer needs.

Outlook and Guidance

AAM updated its 2025 guidance ranges, with sales expected to be between $5.8 billion and $5.9 billion, adjusted EBITDA between $710 million and $745 million, and adjusted free cash flow between $180 million and $210 million. The company expects a robust 2026, with large SUV and pickup truck markets remaining healthy, and ICE and ICE hybrid powertrains continuing to have meaningful longevity and consumer demand. As Chris May noted, "We're focused on optimizing our cost structure, productivity, and synergy realization with the Dowlais acquisition."

Valuation and Growth Prospects

With a P/E Ratio of 17.83 and an EV/EBITDA of 4.03, the market appears to be pricing in a moderate growth trajectory for AAM. Analysts estimate revenue growth of 0.4% next year, which may be conservative given the company's strong track record of delivering upside surprises. The upcoming Dowlais acquisition is expected to further strengthen AAM's portfolio and drive synergy realization.

Leverage and Capital Allocation

AAM remains committed to deleveraging its balance sheet, with a pro forma net leverage expected to be around neutral following the Dowlais acquisition. As Chris May stated, "Our top priority will continue to be reducing leverage and paying down debt in the near term and medium term." With a Net Debt / EBITDA ratio of 3.0, there is a clear focus on improving the company's credit profile.

3. NewsRoom

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American Axle & Manufacturing Holdings, Inc. (AXL) Presents at UBS Global Industrials and Transportation Conference Transcript

Dec -03

Source: seekingalpha.com

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American Century Companies Inc. Grows Holdings in American Axle & Manufacturing Holdings, Inc. $AXL

Dec -03

Source: defenseworld.net

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American Axle & Manufacturing Holdings, Inc. (AXL) Presents at Bank of America Leveraged Finance Conference Transcript

Dec -02

Source: seekingalpha.com

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Head-To-Head Analysis: American Axle & Manufacturing (NYSE:AXL) vs. Denso (OTCMKTS:DNZOY)

Dec -02

Source: defenseworld.net

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Carbon Streaming (OTCMKTS:OFSTF) and American Axle & Manufacturing (NYSE:AXL) Head to Head Survey

Nov -30

Source: defenseworld.net

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Arrow Exploration operations and profitability boosted by infrastructure investments

Nov -27

Source: proactiveinvestors.co.uk

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AAM to Present at the BofA Leveraged Finance Conference 2025 on December 2

Nov -26

Source: prnewswire.com

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AAM to Present at the UBS Global Industrials and Transportation Conference 2025 on December 3

Nov -26

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.07%)

6. Segments

Driveline

Expected Growth: 1.2%

The 1.2% growth of Driveline from American Axle & Manufacturing Holdings, Inc. is driven by increasing demand for light trucks and SUVs, rising content per vehicle, and growing adoption of electric and hybrid vehicles. Additionally, the company's focus on electrification, autonomous, and connectivity technologies, as well as its efforts to reduce emissions, are contributing to its growth.

Metal Forming

Expected Growth: 0.8%

The 0.8 growth in Metal Forming from American Axle & Manufacturing Holdings, Inc. is driven by increasing demand for lightweight vehicle components, growth in electric vehicle adoption, and expansion into new markets. Additionally, the company's focus on operational efficiency and cost reduction initiatives have contributed to the segment's growth.

7. Detailed Products

Axle Components

American Axle & Manufacturing Holdings, Inc. designs, engineers, and manufactures axle components, including axle shafts, ring and pinion gears, and axle bearings, for light vehicle and commercial vehicle markets.

Driveline Components

The company produces driveline components, such as driveshafts, driveline systems, and power transfer units, for light vehicle and commercial vehicle markets.

Differential Assemblies

American Axle & Manufacturing Holdings, Inc. manufactures differential assemblies, including front and rear differentials, for light vehicle and commercial vehicle markets.

Electrification Products

The company offers electrification products, including electric drive units, electric motors, and power electronics, for electric and hybrid vehicles.

Metal Formed Products

American Axle & Manufacturing Holdings, Inc. produces metal formed products, including forged and machined components, for automotive and industrial markets.

8. American Axle & Manufacturing Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for American Axle & Manufacturing Holdings, Inc. is medium due to the presence of alternative technologies and suppliers in the automotive industry.

Bargaining Power Of Customers

The bargaining power of customers is high due to the concentration of major automotive manufacturers, such as General Motors, Ford, and Fiat Chrysler Automobiles, which gives them significant negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers in the market, but also due to the concentration of a few large suppliers, which can exert some bargaining power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry, including significant capital requirements, technological expertise, and established relationships with major automotive manufacturers.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the automotive industry, with multiple players competing for market share and contracts with major automotive manufacturers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 82.24%
Debt Cost 5.21%
Equity Weight 17.76%
Equity Cost 14.94%
WACC 6.94%
Leverage 463.22%

11. Quality Control: American Axle & Manufacturing Holdings, Inc. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Dana

A-Score: 4.8/10

Value: 4.7

Growth: 3.3

Quality: 2.4

Yield: 5.0

Momentum: 9.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
XPEL

A-Score: 4.6/10

Value: 4.1

Growth: 9.0

Quality: 7.9

Yield: 0.0

Momentum: 2.5

Volatility: 4.0

1-Year Total Return ->

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Stock-Card
Holley

A-Score: 4.0/10

Value: 6.8

Growth: 5.9

Quality: 2.6

Yield: 0.0

Momentum: 6.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
American Axle

A-Score: 3.7/10

Value: 7.7

Growth: 4.0

Quality: 2.9

Yield: 0.0

Momentum: 4.0

Volatility: 3.7

1-Year Total Return ->

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Stock-Card
Superior Industries International

A-Score: 3.1/10

Value: 10.0

Growth: 1.9

Quality: 4.4

Yield: 0.0

Momentum: 0.5

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Commercial Vehicle Group

A-Score: 2.6/10

Value: 9.1

Growth: 0.9

Quality: 2.9

Yield: 0.0

Momentum: 1.0

Volatility: 2.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.34$

Current Price

6.34$

Potential

-0.00%

Expected Cash-Flows