Magna International Inc. - Deutsche Banc Alex. Brown's Ken Blaschke Initiates Research Coverage

    When Will Magna's Financial Performance Be Reflected In Its Valuation?

    NEW YORK, Aug. 21 Deutsche Banc Alex. Brown analyst Ken
Blaschke initiated coverage on shares of auto supplier Magna International
Inc. ($63.28) with an investment rating of BUY and a 12-month price
target of $75.
    While Magna's earnings are not immune to declines in global vehicle
production, the company is in a better position than the average automotive
supplier with a much stronger balance sheet as well as a much lower fixed cost
structure, according to Blaschke.  "We project that in 2001, Magna will be the
only North American automotive supplier with higher net income, despite the
downturn in North American vehicle production," he said.
    Blaschke's positive opinion on shares of Magna is based on the following
investment thesis:

     (1) Revenue growth should outpace production for years through growing
         content per vehicle, given Magna can supply 50-60% of the content in
         the vehicle;

     (2) Magna's non-union labor force gives it a competitive advantage while
         providing employees with incentives aligned with shareholder
         interests;

     (3) The core to the Magna story centers on our belief that Magna will
         continue to outgrow vehicle production via increased content per
         vehicle and higher productivity.

    "Magna's stellar earnings performance versus its peers is due to its
technology and product portfolio, corporate structure, and labor relations,"
said Blaschke.  "We believe that Magna should be a core holding in the auto
supplier universe and is one of the most likely companies to outperform the
industry and the market over the long term."

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