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Investing.com - Jefferies has assumed coverage on Schaeffler AG (ETR:SHA_p) (SHA:GR) (OTC:SFFLY) with a Hold rating, lowering the price target to EUR4.45 from EUR5.80.
The research firm views Schaeffler as potentially "the most interesting transformation story in the sector" but notes the company still has "a lot to prove first" before warranting a more positive outlook.
Under Jefferies’ base case scenario for E-Mobility margin improvement, the firm estimates a 67% increase in group EBIT by fiscal year 2027, with potential for group EBIT to double if the division reaches breakeven sooner than anticipated.
Jefferies identifies the pathway to profitability for Schaeffler’s eMobility division as the key catalyst, expecting this to be a focus at the upcoming Capital Markets Day.
The firm also highlights execution risk, noting historical difficulties at Vitesco, and cautions that increased hybrid penetration versus battery electric vehicles could hinder progress in the company’s transformation efforts.
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