Magna shares pop

Posted by Niall McGee on November 6, 2009

Losing Opel may be a huge personal disappointment for Magna International founder and chair Frank Stronach, but shareholders have little to gripe about.

The stock is up more than 20% since GM pulled the plug on the sale of Opel to the Ontario auto parts company. 

Late Thursday, the company also reported earnings which were a lot better than the Street expected. 

Co-CEO Don Walker shrugged off any talk of buying another auto manufacturer during the conference call.

The focus he says is on the core parts business.

One analyst is still lukewarm on Magna though.

Deutsche Bank is keeping its "hold" rating on the stock despite the events of the past few days. The bank's concerns include the long-term impact of Magna’s attempt to buy Opel, as well as the lingering impact of the run Magna took at Chrysler a number of years ago.

Deutsche Bank also points out it may take some time for relationships with its customers to normalize. It says customers are likely to take into account Magna’s multiple attempts to become an automaker in their future sourcing decisions. If Magna ever becomes a carmaker it will be competing with it own customers.

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