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|American Axle & Manufacturing |(AXL-NYSE) | $29.61 |

Note to Readers: All new or revised material since the last report is highlighted.

Reason for Report: News Update Previous Edition: June 15, 2007

Recent Events – Summary

June 15, 2007, AXL received $250 million unsecured term loan credit line.

May 23, 2007, AXL announced a cash dividend of $0.15 per share payable on June 28.

May 17, 2007, AXL announced that it has been awarded a new contract by Chery Automobile Co., Ltd.

April 27, 2007, AXL released its 1Q07 earnings results.

Overview

Key investment considerations as identified by analysts are as follows:

|Key Positive Arguments |Key Negative Arguments |

|Focus on customer diversification |High raw material costs |

|Strong free cash flow |Weak General Motors production |

|Strong track record |Substantial increase in steel costs |

|Investment grade balance sheet |Extreme weakness in the automotive industry |

|AXL is seen as becoming cost competitive |Incremental cost associated with new business |

|Strong backlog provides a solid case for growth, despite challenging |Labor risks in the coming years |

|industrial conditions | |

Michigan-based American Axle & Manufacturing Holdings (AXL or the Company), Inc. is a global Tier I supplier to the automotive industry. It is also involved in the production, engineering, design and validation of driveline systems and related powertrain components and chassis modules for light trucks, sport-utility vehicles (SUVs) and passenger cars. Driveline systems include components that transfer power from transmission and deliver it to the drive wheels. Driveline and related powertrain products include axles, chassis modules, driveshafts, chassis and steering components, driving heads, crankshafts, transmission parts and forged products. As a result of its Component Supply Agreement (CSA) and Lifetime Program Contracts (LPCs) with General Motors Corporation (GM), the Company is the sole-source supplier to GM for certain axles and other driveline products for the life of each GM vehicle program covered by the LPC.

Further information on the Company can be found at:

NOTE: The Company’s fiscal references coincide with the calendar year end.

Recent Events – Details

On June 15, 2007, AXL received a $250 million unsecured term loan credit line from JPMorgan Chase Bank NA. The term loan will mature in 2012, replacing an existing unsecured term loan, according to a filing with the Securities and Exchange Commission.

On May 23, 2007, AXL announced a cash dividend of $0.15 per share payable on June 28, 2007 to stockholders of record on all of the Company's issued and outstanding common stock as of June 7, 2007.

On May 17, 2007, AXL announced that it has been awarded a new contract by Chery Automobile Co., Ltd. to produce rear drive modules (RDM) for a 2009 model-year crossover vehicle. Terms of the deal were not disclosed.

On April 27, 2007, AXL released its 1Q07 earnings results. Highlights are:

• The Company posted 1Q07 net sales of $802.2 million

• Gross profit increased by 21.3 million, a rise of 84.8% y/y versus $84.8 million in 1Q06.

• Net income was $15.4 million in 1Q07 with a Diluted EPS of $0.30 per share.

Further details will be provided below.

Revenue

Net sales in 1Q07 were $802.2 million, down 3.9% y/y as compared to $834.8 million in 1Q06 (in line with Zacks Digest Average). Sales in 1Q07 reflect an approximate 2% y/y decrease in customer production volumes for the major full-size truck and SUV programs for GM and The Chrysler Group as compared to 1Q06. AXL thinks that customer production volumes for its mid-sized truck and SUV programs were down 32% y/y in 1Q07 versus 1Q06. Non-GM sales represented 20% of AXL's total sales in 1Q07.

AXL's content per vehicle increased by nearly 4% y/y to $1,252 in 1Q07 as compared to $1,205 in 1Q06. This increase primarily reflects the impact of new AXL content appearing on GM's all-new, award-winning full-size pickup trucks.

The Company has a positive outlook for 2007 and expects revenue to increase to approximately $3.3 billion. Further the Company expects production in North American light truck program to decline 2% y/y as compared to 2006. AXL also expects to incur an additional $25 million special charge relating to attrition program activities.

Provided below is a summary of revenue as compiled by Zacks Digest.

|Revenue ($MM) |

|Positive |38.5% |

|Neutral |53.8% |

|Negative |7.7% |

|High |$33.00 |

|Low |$24.00 |

|Median |$31.00 |

|Avg. Target Price |$29.80 |

|No. of Analysts with Target |10/13 |

|Price/Total | |

The analyst (R W. Baird) with the lowest target price employed a metric of 5x 2008 EBITDA estimates to value the stock. The analyst (Keybanc) with the highest target price used 4.5x2008E EBITDA estimate of $483.0 million. Most analysts have used an EV/EBITDA or EPS-based methodology to arrive at their respective target prices. Valuation targets provided by individual analysts vary significantly attributable to differences in valuation techniques and underlying model assumptions.

Please refer to the Zacks Research Digest spreadsheet of AXL for more details on valuation.

Capital Structure/Solvency/Cash Flow/Governance/Other

Net cash provided by operating activities in 1Q07 was $9.8 million as compared to $7.0 million in 1Q06. Capital spending was down $38.3 million in 1Q07 on a year-over-year basis to $42.5 million versus 1Q06. The change reflects the impact of this activity and dividend payments of $7.8 million. AXL's free cash flow use was $40.5 million in 1Q07, improved by over $40 million as compared to 1Q06. Capital expenditure fell 47% approximately, following the completion of the GMT-900 launch. Net debt rose approximately 23% y/y and 6% sequentially.

Reflecting the impact of the Company’s updated 2007 earnings outlook, a reduction in AXL's capital spending is expected in 2007 to a range of $225 million to $230 million and the continuation of its quarterly cash dividend program. AXL also reconfirmed that it expects its free positive cash flow to exceed $100 million in 2007 after spending $100 million to support restructuring activities during the year. AXL's plan to generate more than $100 million of free positive cash flow in 2007 will enhance the Company’s ability to invest in the continuing diversification of the product portfolio, customer base and global manufacturing footprint.

On February 22, 2007, AXL announced an offering of $300.0 million of 10-year senior unsecured notes due 2017. Net proceeds from this financing are to be used for general corporate purposes, including repaying amounts outstanding under the Company's revolving credit facility.

Potentially Severe Problems

None other than those discussed in other sections of this report.

Long-Term Growth

The Digest average long-term growth rate is 10% (Zacks Investment Research; Wachovia).

The global auto industry is highly cyclical, vulnerable to sudden shifts in consumer sentiment, employment, interest rates, and general economic activity. Growth in the auto industry is likely to be stagnant because of weak demand and pricing. AXL, however, has a strong book of business through 2014, a robust portfolio of technology-based driveline products and systems, and a deep management team. Analysts believe management is doing an effective job positioning the Company to take advantage of potential acquisition that may arise as the auto supplier sector consolidates.

Upcoming Events

On July 27, 2007, AXL is expected to release its 2Q07 earnings results.

Individual Analysts Opinions

POSITIVE RATINGS (38.5%)

Wall Street Strategies – Buy ($32 - target price): 04/30/07 – The analyst has maintained a Buy rating but increased the target price from $31 to $32.

Key Banc – Buy (2) ($33 - target price): 06/12/07 – The analyst reiterated a Buy (2) rating and the target price of $33. INVESTMENT SUMMARY: The analyst believes that the new contract by Chery Automobile Co., Ltd to produce rear drive modules (RDM) for FY09 will remove the criticism that AXL is too concentrated geographically, segment wise and customer wise.

J. P. Morgan – Overweight: 04/30/07 - The analyst maintained the Overweight rating on the stock.

Lehman – 1-Overweight ($32.00- target price): 06/20/07 - The analyst is optimistic and reiterates a 1-Overweight rating with a target price of $32. INVESTMENT SUMMARY: The analyst continues to have a positive outlook towards the Company’s production and expects the production and mix pressures to be greater than expected in 2007. The analyst feels that the production of heavy-duty Dodge Ram is likely to suffer declines in light of the increased competition from the Ford, GM and Toyota offerings. However, the analyst believes that AXL will still be able to achieve the lower end of its earnings guidance even in a tough production environment.

UnionBankSwitz. – Buy 2 ($32- target price): 06/20/07 – The analyst has maintained the Buy 2 rating on the stock, and the target price of $32 to reflect the potential revenue accretion from merger and acquisition as well as the positive outlook toward earnings.

NEUTRAL RATINGS (53.8%)

Zacks Investment Research – Hold ($29 – target price): 04/28/07 – The analyst has rated the stock Hold with a target price of $29. INVESTMENT SUMMARY: The analyst believes the Company’s focus on diversification, product mix improvements and sourcing to low cost countries are some of the positives associated with the stock. However, the analyst remains concerned about rising commodity costs and pricing pressure from OEMs.

B. of America – Neutral ($32 - target price): 06/11/07 - The analyst has maintained a Neutral rating and the target price of $32. INVESTMENT SUMMARY: The analyst believes that most of the sales of AXL are to GM and the analyst expects the success of the new GM T900 platform program to be short lived. The markets for these products are getting competitive thus the analyst remains Neutral on the stock.

Citigroup – Hold (2) ($26 – target price): 06/20/07 – The analyst has maintained a Hold (2) rating and the target price of $26. INVESTMENT SUMMARY: AXL is one of the most efficient and best run suppliers in the automotive industry and the analyst continues to believe the shares represent long-term value for investors. Further, the analyst believes that in the long run the Company’s shares will profit from high revenue streams and an investment grade balance sheet based on contracts booked through 2015. However, uncertainty regarding the GM production levels keeps the analyst on the sidelines.

Deutsche Bank – Hold ($30 – target price): 04/30/07 - The analyst has maintained the Hold rating and the target price of $30. INVESTMENT SUMMARY: The analyst remains positive on the stock based on several catalysts in the coming year which include Ford’s and Chrysler’s plans to divest in Axle’s manufacturing operations and AXL’s cost cutting initiatives. The analyst believes that although some of these opportunities are more likely than others, any of the business wins would add to earnings growth.

Merrill – Neutral: 04/30/07- The analyst rates the stock Neutral.

MorganStanley – Equal weight (no target price): 05/01/07 - The analyst downgraded the rating to Equal weight and removing the target price from $25. INVESTMENT SUMMARY: The analyst believes there exists a high probability of business wins and major cost savings in 2008, and further believes that the OPEB deal is unlikely as it would provide negative cash flows even if AXL has a positive outlook towards its earnings.

Wachovia – Market Perform ($27- $29 - target price): 04/30/07 - The analyst reaffirms a Market Perform rating with an average 12-month price objective of $28. INVESTMENT SUMMARY: The analyst believes Axle is in a good position with a strong book of business through 2014 with a robust portfolio of technology based products and systems. The analyst believes that 2007 will be a transitional year for the Company, attributable to restructuring initiatives implemented at GM. The analyst sees management poised for acquisitions or resourcing opportunities that may occur owing to consolidation in the automotive supplier sector.

NEGATIVE RATINGS (7.7%)

R W. Baird – Underperform: ($24 - target price): 04/30/07 - The analyst has maintained an Underperform rating but increased the target price from $19 to $24. INVESTMENT SUMMARY: The analyst recommends investors to avoid the stock, based on the fact that the Company is losing GM truck market share with discontinued products and lower-than-expected capacity utilization. Further, the analyst believes that there is high degree of risk owing to the truck demand at GM and Chrysler implementing the Buy-out program. Further the analyst believes that a meaningful recovery in EBITDA would justify the stocks price.

Research Analyst: Deepa Agarwal

Reviewed By:

Copy editor: Oindrila Banerjee

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Zacks Research Digest

111 N. Canal Street, Suite 1101 Ï% Chicago, IL 60606

July 5, 2007

Research Analyst : Deepa Agarwal, M.Fin, .

Scom 111 N. Canal Street, Suite 1101 ● Chicago, IL 60606

July 5, 2007

Research Analyst : Deepa Agarwal, M.Fin, .

Sr. Editor: Ian Madsen, CFA; imadsen@;1-800-767-771:x9417

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