Valeo has been downgraded by UBS from Buy to Neutral, with a revised price target of €8. The downgrade is a result of increased uncertainty in the automotive sector.
UBS cites several challenges, including CO2 emissions regulations, strikes at Volkswagen, and customs duties, which are contributing to a difficult market environment. The report also highlights a lack of volume growth and poor visibility regarding OEM production schedules. Additionally, strong cost pressures are expected to keep profit margins low, raising concerns about potential balance sheet weaknesses due to weak free cash flow.