American Axle & Manufacturing (AXL) is likely to have additional upside potential to synergy targets from manufacturing as the company has yet to carry out a "full diligence" on Dowlais' plants, RBC said in a Monday note.

The proposed Dowlais acquisition is both financially and strategically "attractive" for the company and North America production estimates are expected to go higher, analysts led by Tom Narayan wrote.

As Dowlais' stockholders have approved the deal, investors are "only" preparing to work on transaction math, the analysts said, adding that the addition of Dowlais would enhance American Axle's client base and increase its geographic footprint.

Dowlais has a solid market share in the businesses it operates and has a top position throughout driveshafts, propshafts, and AWD systems, the analysts mentioned.

RBC upgraded American Axle & Manufacturing to outperform from sector perform and raised its price target to $8 from $6.

Shares of the company were up 2.5% in recent Tuesday trading.

Price: 5.99, Change: +0.17, Percent Change: +2.84