On Monday, Mizuho Securities adjusted its outlook on Autoliv, Inc. (NYSE:ALV), reducing the price target to $115 from $125 while maintaining an Outperform rating on the stock. Autoliv's recent financial results for the September quarter showed revenue and earnings per share that met market expectations, posting figures at $2.56 billion and $1.84, respectively. This was closely aligned with consensus estimates of $2.55 billion in revenue and $1.90 in earnings per share.
Despite a year-over-year decline in organic sales by 1%, Autoliv's performance was considered better than the overall industry, which saw a 5% drop. The company particularly outperformed in Europe but experienced challenges in Asia, excluding China, where high inventory levels were noted at key customers outside of India. Autoliv has also made a slight revision to its full-year 2024 revenue growth forecast, now expecting a 1% increase, which includes a 1% negative impact from foreign exchange fluctuations, compared to the previous forecast of a 2% increase.
The company reaffirmed its expectation to outperform the 2024 estimated light vehicle production (LVP) by approximately 4 percentage points. Additionally, for the coming December quarter, Autoliv anticipates an 8% sequential increase in customer production plans. Revenue from China, attributed to domestic original equipment manufacturers (OEMs), has risen by 18% year-over-year.
In response to these updates, Mizuho has revised its estimates, leading to the lowered price target. Despite the adjustment, the firm remains positive about Autoliv's market position, citing its strong global market share and the growth of OEMs in China and India. Autoliv's long-term operating margin target of 12% remains unchanged, although the forecast for the current year has been set to the lower end of the 9.5-10% range.
In other recent news, Autoliv, Inc., a prominent automotive safety supplier, showcased its financial resilience in light of the global automotive challenges during its Third Quarter 2024 Earnings Call. The company reported solid sales of $2.6 billion and an adjusted operating income of $237 million, surpassing the nearly 5% decline in global light vehicle production by 4%. Baird, a global financial services firm, maintained a Neutral rating on Autoliv's stock, adjusting the price target to $108 from $103 following these results.
Autoliv's performance in China was particularly noteworthy, with an 18% increase in sales with domestic OEMs. Moreover, the company repurchased 1.3 million shares for $130 million and secured a contract for the first global autonomous L4 full passive safety system. This aligns with Autoliv's anticipation of sales outperformance driven by new light vehicle launches in late 2024 and projected organic sales growth of around 1%.
The company also reiterated its adjusted operating margin guidance of 9.5% to 10% for the year. Despite facing some challenges, Autoliv continues to focus on driving growth and ensuring long-term profitability.
InvestingPro Insights
To complement Mizuho's analysis of Autoliv, Inc. (NYSE:ALV), recent data from InvestingPro offers additional context. Autoliv's P/E ratio stands at 12.9, with an adjusted P/E ratio of 11.0 for the last twelve months as of Q3 2024, suggesting the stock may be undervalued relative to its earnings. This aligns with an InvestingPro Tip indicating that ALV is "Trading at a low P/E ratio relative to near-term earnings growth."
The company's revenue for the last twelve months as of Q3 2024 was $10.53 billion, with a modest growth of 4.63%. While this growth is positive, it's worth noting that quarterly revenue in Q3 2024 saw a slight decline of 1.58%, which corresponds with the challenges mentioned in the article, particularly in Asia.
An InvestingPro Tip highlights that "Management has been aggressively buying back shares," which could be seen as a sign of confidence in the company's future prospects. Additionally, Autoliv "Has maintained dividend payments for 28 consecutive years," demonstrating a commitment to shareholder returns that may appeal to income-focused investors.
For readers interested in a more comprehensive analysis, InvestingPro offers 7 additional tips that could provide deeper insights into Autoliv's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.