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On Wednesday, UBS analyst Juan Perez-Carrascosa increased the price target for Autoliv, Inc. (NYSE:ALV) shares to $123 from the previous $103, while reaffirming a Buy rating for the automotive safety systems provider. Currently trading at $104.03 with a P/E ratio of 11.9x, InvestingPro analysis suggests the stock is undervalued. This adjustment follows Autoliv’s strong first-quarter earnings and the company’s confirmation of its full-year guidance.
Perez-Carrascosa noted that the revised estimates take into account a potentially lower impact from tariffs than was initially anticipated. The UBS analyst emphasized Autoliv’s ability to maintain pricing power and adaptability in the face of potential challenges. The stock has shown strong momentum, with a 12.5% return year-to-date and a 7.8% gain over the past six months. The earnings per share (EPS) forecast has been upgraded by 2-15%, with the new price target now set at $123, which is approximately 5% below the consensus. InvestingPro subscribers can access additional insights through 10 exclusive ProTips for Autoliv.
Autoliv is scheduled to host a Capital Markets Day (CMD) on June 4th in Stockholm. The event will include presentations that can be accessed via webcast, as well as a product expo. The analyst expects management to highlight strategies for revenue growth and its correlation with enhanced profitability during the CMD. Additionally, it is anticipated that the company will reaffirm its medium-term (MT) earnings before interest and taxes (EBIT) margin target of 12%.
Despite the market viewing Autoliv as a relative ’safe haven’ within the supplier segment, the analyst pointed out that the company’s profitability has not yet reached its 2023 CMD goals. These goals include a 12% medium-term and a 13% long-term EBIT margin ambition. The company maintains a strong financial position with an overall "GOOD" health score from InvestingPro, and has maintained dividend payments for 29 consecutive years. With market support considered limited, the focus for management is likely to be on bolstering investor confidence in Autoliv’s journey towards profitable growth. Discover comprehensive analysis and more insights in Autoliv’s Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Autoliv Inc. reported first-quarter earnings and revenue that exceeded analyst expectations, driven by strong sales and effective cost reduction strategies. The company posted an adjusted earnings per share of $2.15, surpassing the analyst consensus of $1.67, with revenue reaching $2.58 billion, above the expected $2.5 billion. Autoliv’s adjusted operating margin improved to 9.9% from 7.6% in the same quarter last year, attributed to organic sales growth and successful cost-cutting measures, including a 6% decrease in total headcount. For the full year 2025, the company reiterated its guidance of around 2% organic sales growth and an adjusted operating margin of approximately 10-10.5%, expecting an operating cash flow of around $1.2 billion.
In analyst updates, TD Cowen’s Itay Michaeli adjusted Autoliv’s stock price target to $106 from the previous $116, while maintaining a Buy rating. This revision follows the company’s first-quarter results and reflects a cautious yet positive outlook on the stock amid tariff and macroeconomic risks. Michaeli’s revised estimates include a 2025 revenue projection of $10.1 billion and an EBIT estimate of $986 million, indicating a slight decrease from previous forecasts. Despite these adjustments, TD Cowen remains optimistic about Autoliv’s risk/reward balance, considering the current economic landscape’s impact on automotive production levels. Autoliv’s record number of new launches is expected to enhance its sales performance in China in 2025, following underperformance in that market during Q1.
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