RBC Capital has raised its price target on American Axle & Manufacturing Holdings (NYSE: AXL) to $12.00, a significant increase from the previous $9.00 target, while reaffirming an Outperform rating on the stock. This updated price projection implies a potential upside of approximately 45% relative to current market prices, reflecting RBC’s growing confidence in American Axle’s financial and operational performance.
Over the past six months, American Axle's stock has already demonstrated notable momentum, with a 64.78% increase according to InvestingPro data, underscoring the company's strong traction in the market. RBC Capital analyst Tom Narayan pointed to the company’s stronger than expected results in its Driveline (DWL) segment and buoyant global automotive production rates as pivotal factors driving this more optimistic valuation.
In the valuation model utilized by RBC Capital, incorporating the full fruition of $300 million in potential synergies and applying peer multiples could suggest an even higher theoretical share value approaching $21. However, the firm has taken a conservative stance by factoring in only $200 million in synergies for the current $12 price target. American Axle was also highlighted as RBC Capital’s leading idea in their preview for the fourth quarter of 2025, where a multiple of four times peer valuation was employed.
Complementing the bullish analyst outlook, American Axle reported its third-quarter 2025 earnings results. The company surpassed earnings per share (EPS) expectations, though revenue fell short of forecasts. Despite this mixed outcome, the Driveline segment was credited with driving a favorable EBITDA performance. Analysts at Stifel described the revenue performance as solid but maintained a Hold rating on the stock with a price target of $7.00.
In addition to earnings performance, American Axle’s strategic initiatives made important strides with the proposed merger involving Dowlais Group. The deal has successfully cleared a major regulatory obstacle, earning approval from China’s State Administration for Market Regulation. This clearance satisfies all relevant regulatory and antitrust requirements. The transaction now awaits court sanction and is anticipated to complete by early February 2026, marking a key advance in the company’s expansion and financial strategy.
These developments collectively illustrate American Axle’s strengthening market position, supported by robust operational metrics and significant strategic transactions. Going forward, the company’s performance and merger completion will be important factors to monitor for investors and market participants alike.