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UBS has dampened sentiment in the automotive sector by downgrading its recommendations for suppliers Forvia and Valeo, leading to declines of 4.9% and 2.9%, respectively. Schaeffler also fell by 4.6%, while Mercedes-Benz dropped 2.0%. In contrast, BMW saw a slight increase of 0.3% due to positive remarks, and Continental's loss was limited to 0.6% thanks to its strong tire business.
UBS has downgraded its recommendations for Forvia and Valeo to "neutral" amid a challenging outlook for the European automotive sector in 2025, citing price pressures, market share losses in China, and stringent CO2 regulations. The bank warns of limited profit margins and volatility in production schedules, while maintaining a "buy" recommendation for Stellantis due to its inventory management. Forvia's new CEO, Martin Fischer, will take over in March 2025 as the company faces significant restructuring risks.
UBS has downgraded Valeo from Buy to Neutral, reducing the price target from €13 to €8 amid significant uncertainty related to CO2 emissions regulations, strikes at Volkswagen, and customs duties. The firm highlights concerns over stagnant volume growth, unclear OEM production schedules, and intense cost pressures, which are likely to keep profit margins at low levels and may lead to balance sheet weaknesses due to weak free cash flow.
UBS has downgraded Forvia from Buy to Neutral, lowering its price target from €13 to €9, citing significant uncertainty and limited balance sheet flexibility. The firm warns that weak free cash flow, lack of volume growth, and strong cost pressures may hinder profit margins and lead to potential balance sheet weaknesses. In related news, Valeo is also facing challenges, with forecasts of plant closures and job cuts in Europe, reflecting the broader struggles within the automotive sector.
UBS has downgraded Valeo from Buy to Neutral, reducing the price target from €13 to €8 amid significant uncertainty related to CO2 emissions regulations, strikes at Volkswagen, and customs duties. The firm highlights concerns over stagnant volume growth, unclear OEM production schedules, and strong cost pressures, which are likely to keep profit margins low and may lead to balance sheet weaknesses due to weak free cash flow.
UBS has downgraded Valeo to Neutral, as reported by AOF and distributed by BOURSORAMA. The analysis is provided for informational purposes only, with no contractual value, and BOURSORAMA maintains a conflict of interest management policy to ensure objectivity in its investment recommendations.
UBS has downgraded Valeo from Buy to Neutral, reducing the price target from €13 to €8 amid significant uncertainty related to CO2 emissions regulations, strikes at Volkswagen, and customs duties. The firm highlights concerns over stagnant volume growth, unclear OEM production schedules, and strong cost pressures, which are likely to keep profit margins low and may lead to balance sheet weaknesses due to weak free cash flow.
UBS has downgraded Valeo from "Buy" to "Neutral," reducing its price target from 13 to 8 euros. Analyst David Lesne highlights significant risks to market expectations for the automotive supplier, citing uncertainties related to CO2 reduction, tariffs, VW strikes, and ongoing restructuring in the automotive sector.
Valeo, a leading automotive equipment supplier, reports its sales breakdown: Powertrain systems (31.1%), Visibility systems (25.1%), Thermal systems (21.5%), and Comfort and driving assistance systems (21.1%). The company operates 175 production sites globally, with sales concentrated in Europe and Africa (42.3%) and North America (18.6%).
UBS has downgraded Valeo from "Buy" to "Neutral," reducing its price target from 13 euros to 8 euros. Analyst David Lesne highlights significant risks to market expectations for the automotive supplier, citing uncertainties related to CO2 reduction, tariffs, and ongoing restructuring in the automotive sector.
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