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On Monday, JPMorgan analyst Ryan Brinkman adjusted the price target for Autoliv, Inc. (NYSE: ALV) to $109.00, down from the previous $115.00, while retaining a Neutral rating on the stock. According to InvestingPro data, the stock appears undervalued based on its proprietary Fair Value model, with a PEG ratio of just 0.29, suggesting attractive growth potential relative to its current valuation. The revision follows Autoliv’s fourth-quarter results and full-year 2025 guidance, which were a mix of higher-than-expected margins and lower-than-expected sales.
Autoliv’s fourth-quarter revenue came in at $2.616 billion, falling short of JPMorgan’s estimate of $2.754 billion and the Bloomberg consensus of $2.728 billion. While the company’s EBIT margin outperformed expectations at 13.4%, compared to JPMorgan’s forecast of 12.7% and the consensus of 12.4%, InvestingPro analysis shows the company maintains relatively weak gross profit margins at 18.55%. The EBIT for the quarter was in line with JPMorgan’s estimate at $349 million and slightly above the consensus of $345 million. InvestingPro subscribers have access to 8 additional key insights about Autoliv’s financial health and market position.
The company’s full-year 2024 Growth over Market (GoM) experienced a negative impact of approximately 2-3 percentage points due to an adverse customer and geographic mix. The GoM was strongest in Japan, followed by the Rest of Asia, and Europe, while it remained flat in the Americas. China’s GoM was down 7 percentage points, reflecting the underperformance of foreign joint ventures.
For the full year of 2025, Autoliv has guided for flat year-over-year revenue, with an expected 2% organic growth offset by a 2% foreign exchange headwind. This guidance suggests a revenue estimate of approximately $10.390 billion, which is lower than JPMorgan’s expectation of $10.800 billion and the consensus of $10.753 billion. The adjusted EBIT margin is projected to be between 10.0% and 10.5%, which is below both JPMorgan’s and the consensus estimates.
As a result of the mixed fourth-quarter performance and the softer guidance for 2025, JPMorgan has trimmed its EBIT estimates for Autoliv. The firm now anticipates an EBIT of $1.088 billion for 2025, a decrease from the previous estimate of $1.129 billion, and $1.202 billion for 2026, down from $1.247 billion. Consequently, the price target for December 2025 has been reduced to $109, reflecting the lowered future earnings estimates. Autoliv shares declined by 4.6% following the announcement, in contrast to a 0.5% drop in the S&P 500.
In other recent news, Autoliv Inc. (NYSE:ALV), a prominent automotive safety systems supplier, reported a mixed bag in its fourth-quarter earnings. The company surpassed analyst predictions with adjusted earnings per share of $3.05, outpacing the forecasted $2.88. However, Autoliv’s Q4 revenue of $2.62 billion fell short of the estimated $2.7 billion, marking a 4.9% decrease compared to the same quarter last year.
Despite the revenue miss, the company achieved record profitability for the quarter. Operating income reached a new high of $353 million, with an operating margin of 13.5%. Adjusted operating income also hit a record at $349 million, with an adjusted operating margin of 13.4%.
In the face of these developments, Autoliv provided guidance for the full year 2025, projecting organic sales growth of around 2% and an adjusted operating margin of approximately 10-10.5%. Autoliv expects operating cash flow of around $1.2 billion for the year. Despite anticipating a challenging 2025 for the automotive industry, the company remains focused on efficiency improvements to support further profitability gains.
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