ZF Friedrichshafen : Make use of the sell-off!

We have been very negative on ZF in the last months, but given the market sell-off, we finally got to spreads and absolute yields which are attractive. This in light of the company’s good liquidity situation.
Having said this and connecting what is going on in the world right now, the automotive market won’t be isolated. If the world ends up in a (deep) recession then ZF’s end markets (cyclical light vehicles, commercial vehicles, industrials) will be hit and would create additional stress for the group, which is already under stress given transformational and other challenges. Hence, the FY 25 guidance (revenue: EUR >40bn; adj. EBIT Margin: 3-4%; adj. FCF: >EUR 500m) is maybe already in jeopardy.
A key plus now for the group is its liquidity position, which covers debt maturities for some years, albeit the future free cash flow profile (over multiple periods) is difficult to project for the time being. Lack of transparency is part of the problem.
We maintain our Negative Credit Opinion but want to propose a tactical approach and recommend buying certain short-term and mid-term dated bonds.
ZFFNGR 3.000% 2025: Neutral (vs. Reduce)
ZFFNGR 2.000% 2026: Buy (vs. Reduce)
ZFFNGR 5.750% 2026: Buy (vs. Reduce)
ZFFNGR 2.000% 2027: Buy (vs. Reduce)
ZFFNGR 2.750% 2027: Buy (vs. Reduce)
ZFFNGR 2.500% 2027: Buy (vs. Reduce)
ZFFNGR 2.250% 2028: Buy (vs. Reduce)
ZFFNGR 3.750% 2028: Buy (vs. Reduce)
ZFFNGR 4.750% 2029: Neutral (vs. Reduce)
ZFFNGR 6.125% 2029: Neutral (vs. Reduce)
ZFFNGR 3.000% 2029: Neutral (vs. Reduce)