Report
Michael Foundoukidis

ODDO : Recent Auto Parts rebound looks premature, downgrades not over yet

>The environment is still tough and does not give cause for optimism - The upcoming Q1 2019 earnings reports from auto suppliers are unlikely to provide grounds for optimism and should confirm our cautious stance on the segment in the short term. Indeed, the low level of activity in Q1 is likely to result in a strong fall in profitability at certain players in Q1/H1, notably so-called technology players (Continental, Valeo), which in our view are in the front line and...
Underlyings
CONTINENTAL AKTIENGESELLSCHAFT

Continental is an automotive industry supplier. Co.'s automotive divisions comprised of: Chassis & Safety, which develops and produces systems that provide safety and enhanced vehicle dynamics; Powertrain, which develops solutions for gasoline and diesel engines, as well as hybrid and electrical drive systems; and Interior, which provides solutions for information management within vehicles and networking between vehicles. Co.'s rubber divisions comprised of: Tires, which provides tires for passenger cars through trucks, buses and construction site vehicles to special vehicles, motorcycles and bicycles; and ContiTech, which develops products made from rubber and plastic.

Faurecia SA

Faurecia is an automobile equipment supplier based in France. Co.'s activities can be divided into four business units: Automotive Seating (design of vehicle seats, manufacture of seating frames and adjustment mechanisms, and assembly of complete seating units); Emissions Control Technologies (design and manufacture of exhaust systems); Interior Systems (design and manufacture of instrument panels, door panels and modules, and acoustic components); and Automotive Exteriors (design and manufacture of front ends and safety modules). Some of Co.'s customers are PSA Peugeot Citroen, VW Group, Renault-Nissan, Ford Group, BMW and GM Group.

Plastic Omnium SE

Compagnie Plastic Omnium is a manufacturing and services company which partners with car manufacturers and local communities, through its two core businesses which are Automotive Equipment and Environment. Co.'s activities can be divided into two divisions: the Automotive division and the Environment division. The Automotive division designs, manufactures and sells vehicle body parts (exterior parts and modules) and plastic fuel systems. The Environment division provides products and services for local authorities, including waste pre-collection and management equipment and services, and road and highway signage.

Valeo SE

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.

Provider
Oddo BHF
Oddo BHF

​Oddo Securities provides securities brokerage and research services. The company offers equity, economic, and derivatives research and credit analysis services. It focuses on insurance, automotive, building materials, pharmaceuticals, telecommunications, information technology, and agri-food industries.

Analysts
Michael Foundoukidis

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