Valeo: You know there is more to come
Valeo: (BUY, Fair Value EUR65 (+13%))You know there is more to come
During the breakfast that we organized with Valeo’s CFO in Paris this week, the group’s 2018 targets were reiterated, as well as sales acceleration expected as for 2019 and beyond, based on a solid order book acquired years ago. 2018 is clearly a transitional year for Valeo, with poorer LfL sales growth expected vs. most of its peers, no margin growth and FCF deterioration vs. last year. We confirm our Buy rating with FV and estimates unchanged. We are fully aware that current investor confidence crisis toward Valeo’s management could weigh on the short-term share price performance, but assume the progressive sales and margin improvement expected in coming quarters will resolve it.
Valeo is an automotive supplier, partner to automakers worldwide. As an industrial and technology company, Co. focuses on designing, manufacturing and selling components, integrated systems and modules for automobiles and heavy goods vehicles, both on the original equipment and the aftermarket segments. In addition, Co. offers innovative products and systems that contribute to the reduction of CO2 emissions and to the development of intuitive driving to its customers. Co. operates through four business groups: Comfort and Driving Assistance Systems, Powertrain Systems, Thermal Systems, and Visibility Systems.
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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