2025-05-19-Bernstein-法雷奥集团（FR）_法雷奥2025年第一季度后销售模型更新及目标价下调_16页_1mb

Valeo Q1 2025 Earnings Analysis Summary

Rating and Price Target Update

• Rating: Outperform
• Price Target: €11 (down from previous €13), reflecting revised lower revenue and margin estimates due to ongoing auto tariffs concerns.

Q1 2025 Performance

• Revenue for Q1 2025 was €5.3 billion, aligning with market expectations but below some peer performance due to negative geographic mix.
• Dividend yield stands at 4.5%.
• EPS estimate for 2025E is €1.30, down from prior €1.50.
• Valuation suggests potential upside of about 16% based on current analysis.

Outlook and Challenges

• Valeo expects to secure full tariff compensation by mid-2025, with 75% already agreed.
• Maintained FY2025 guidance with a revenue target range of €21.5B–22.5B, operating margin between 4.5%–5.5%.
• Higher interest expenses impact projected net income, contributing to a downward EPS revision of 13%.
• Concerns remain over reduced light vehicle (LV) production volumes amid ongoing auto tariffs.

Strategic Measures

• Cost Reduction: Target €425 million FCF in H1 2025 through SG&A cuts (5%) and investment cuts (15%).
• Collaboration: Secured a major deal with Volkswagen for ADAS development on the MQB platform, with SOP in 2028.
• Repositioning: Focusing on cost resilience to counteract subdued volumes.

Investment Implications

• Lower Estimates: Revised revenue target to the lower end of guidance, pressuring the necessary PT reduction.
• Valuation Basis: Uses sector averages (EV/EBIT at 7.6x, P/E at 7.9x) with adjustments for profitability, leading to a €11 PT.

Risks

• Tariff outcomes, production delays, regulatory issues, and macroeconomic disruptions.

Performance

• YTD share price up 1%, compared to -7% in peer Forvia, highlighting debt-light advantages.

Department:
Valeo SA

• Contact: Stephen Reitman, CFA
• Research Analyst: Saul Coleman