By Jewel Gopwani, Detroit Free Press
Jul. 29--Shares of American Axle & Manufacturing fell 17% on Monday after a Wall Street analyst downgraded the company's shares because of its reliance on pickups and SUVs made by General Motors Corp., which has been cutting production of those vehicles as consumers shift to smaller, more fuel-efficient cars.
GM announced another cut Monday, this time shaving 117,000 light trucks from its production schedule.
Shares of American Axle, which trade in New York under the ticker AXL, fell $1.13, or 17.4%, to $5.38 at the end of trading Monday.
KeyBanc auto analyst Brett Hoselton downgraded American Axle's stock Monday from a buy to a hold rating, despite a plan the company laid out Friday to cut costs.
The plan includes job cuts, capacity cuts and slashing the dividend.
Still, Hoselton wrote in a research report, "one must always acknowledge that the company's earnings power is inextricably linked to the fortunes of its biggest automaker customer ... and its light-truck platforms."
Lehman Brothers Equity Research cut its price target for the shares from $11 to $8 but stopped short of downgrading the stock.
A series of truck production cuts since May has hammered American Axle and its stock.
A 3-month strike at the supplier, lower production volumes and restructuring costs aimed at making the company smaller led to a $644-million second-quarter loss.
The company's market capitalization has plummeted from $912.6 million at the beginning of the year to $277.6 million at the end of trading Monday.
Contact JEWEL GOPWANI at 313-223-4550 or jgopwani@freepress.com.
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Story Source: Detroit Free Press
