Autoliv (ALV – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Michael Jacks from Bank of America Securities reiterated a Buy rating on the stock and has a $145.00 price target.
Michael Jacks has given his Buy rating due to a combination of factors including Autoliv’s solid execution and profitability in a challenging market. Autoliv’s revenue outperformed that of its peers, growing 4.9% year-over-year, which is notably higher than the industry’s flat or negative sales trends. This growth was achieved despite a slight negative geographic mix and exceeded the market’s light vehicle production by approximately six percentage points. Additionally, Autoliv’s adjusted EBIT of $199 million surpassed expectations by 7%, with an EBIT margin of 7.6%, reflecting efficient cost reduction efforts and an effective conversion of sales to profit.
Furthermore, Autoliv’s cash flow dynamics and unchanged guidance for 2024 suggest a conservative yet promising outlook, with the potential for future upsides. The guidance anticipates organic top-line growth, an adjusted EBIT margin around 10.5%, and strong operating cash flow, underpinned by robust cost reduction measures that are ahead of schedule. Jacks has increased his adjusted EBIT and EPS forecasts for the coming years, reflecting confidence in Autoliv’s financial performance. Additionally, the stock’s valuation metrics such as EV/Sales, EV/EBIT, and P/E remain below the 10-year historical average, presenting an attractive investment proposition. The firm’s commitment to a substantial share buy-back plan further supports the Buy rating, with the price objective being raised to $145 per share.
According to TipRanks, Jacks is a 4-star analyst with an average return of 23.0% and a 90.48% success rate.
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Autoliv (ALV) Company Description:
Autoliv, Inc. engages in the development, manufacture, and supply of automotive safety systems. It operates through the Passive Safety and Electronics segment. The Passive Safety segment includes airbags, seatbelts, steering wheels, and restrain electronics. The Electronics segment comprises of restraint control systems, brake control systems and active safety. The company was founded by Lennart Lindblad in 1953 and is headquartered in Stockholm, Sweden.
