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Autoliv (ALV)
NYSE:ALV
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Autoliv
(NYSE:ALV)
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Rating:71Outperform
Price Target:
$134.00
▲(13.06% Upside)
Action:ReiteratedDate:02/01/26
The score is driven primarily by solid financial performance (higher margins, improving cash generation) and supportive valuation (low-teens P/E with a mid-2% yield). Offsetting these positives, technical momentum is currently soft versus short-term averages, and the latest earnings outlook points to a weak Q1 and cost headwinds even as management targets stable full-year margins and cash flow.
Positive Factors
Strong cash generation
Sustained, record-level cash generation and 100% cash conversion improve funding for capex, R&D and shareholder returns without depending on equity issuance. Robust operating cash flow supports durable capital allocation and resilience through cyclic auto production swings.
Improving operating profitability
Margin expansion reflects structural cost programs, productivity gains and higher-value product mix. Sustained ~10% operating margins increase free cash flow potential and provide buffer against cyclical OEM demand, supporting long-term profitability if efficiency gains persist.
Market position & product wins in Asia
Significant outperformance in China and India shows strong penetration in fast-growing markets and diversification versus mature regions. Combined with new advanced-safety orders and partnerships, this strengthens long-term revenue growth potential and OEM relationships in high-growth geographies.
Negative Factors
Leverage close to equity
Leverage near parity limits balance-sheet flexibility to invest or weather downturns. With debt close to equity and only moderate headroom, prolonged volume weakness or unexpected recalls could constrain cash available for capex, R&D or accelerated deleveraging plans.
Raw material & tariff headwinds
With gross margins in a relatively tight band (~19% in 2025), persistent commodity inflation and unrecovered tariff costs can materially compress operating margins and free cash flow. Limited pass-through to OEMs would pressure sustainable profitability over the medium term.
OEM sourcing uncertainty & shorter program lifecycles
Shorter program lifecycles and OEM repricing decisions reduce visibility into multi-year content and revenue streams. This structural shift increases exposure to mix and order volatility, making long-term sales planning, capacity utilization and margin stability more challenging.
Autoliv (ALV) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.85B
Dividend Yield2.6%
Average Volume (3M)713.43K
Price to Earnings (P/E)12.4
Beta (1Y)0.90
Revenue Growth0.84%
EPS Growth26.17%
CountryUS
Employees59,310
SectorConsumer Cyclical
Sector Strength84
IndustryAuto - Parts
Share Statistics
EPS (TTM)3.19
Shares Outstanding74,706,510
10 Day Avg. Volume612,641
30 Day Avg. Volume713,427
Financial Highlights & Ratios
PEG Ratio0.64
Price to Book (P/B)3.54
Price to Sales (P/S)0.84
P/FCF Ratio12.72
Enterprise Value/Market Cap1.22
Enterprise Value/Revenue1.00
Enterprise Value/Gross Profit5.23
Enterprise Value/Ebitda7.23
Forecast
1Y Price Target
$135.05Price Target Upside13.95% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)10.6
Revenue Forecast (FY)$11.03B
Autoliv Business Overview & Revenue Model
Company DescriptionAutoliv, Inc., through its subsidiaries, develops, manufactures, and supplies passive safety systems to the automotive industry in Europe, the Americas, China, Japan, and rest of Asia. It offers passive safety systems, including modules and components for frontal-impact airbag protection systems, side-impact airbag protection systems, seatbelts, steering wheels, inflator technologies, and battery cut-off switches, as well as anti-whiplash systems and pedestrian protection systems, and connected safety services and solutions for riders of powered two wheelers. The company primarily serves car manufacturers. Autoliv, Inc. was founded in 1953 and is headquartered in Stockholm, Sweden.
How the Company Makes MoneyAutoliv generates revenue primarily through the sale of automotive safety products to vehicle manufacturers. The company's revenue model is based on long-term contracts with major automotive OEMs (Original Equipment Manufacturers), where they supply safety systems that are essential for vehicle compliance with safety regulations. Key revenue streams include the sales of airbags, seatbelt systems, and electronic safety systems, which are integral to modern vehicles. Autoliv also invests in research and development to innovate and expand its product offerings, including collaborations with technology companies to enhance safety features in autonomous vehicles. Significant partnerships with leading automotive brands help secure ongoing revenue and facilitate the introduction of new safety technologies into the market.
Autoliv Key Performance Indicators (KPIs)
Autoliv Earnings Call Summary
Earnings Call Date:Jan 30, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 17, 2026
Earnings Call Sentiment Positive
The call communicated strong financial and operational results, including record sales, record free operating cash flow, improved full‑year profitability and significant shareholder returns, underpinned by outperformance in fast‑growing Asian markets (notably China and India) and progress on cost‑savings and technology initiatives. Offsetting these positives are near‑term headwinds: Q4 margin compression, an unfavorable regional mix, expected raw material and tariff impacts, increased working capital, and Q1 2026 volume weakness. On balance, the positive record results, balance sheet strength, continued outperformance in key growth markets, and clear cost‑reduction progress materially outweigh the near‑term challenges and uncertainties presented.Q4-2025 Updates
Positive Updates
Record Sales — Quarter and Full Year
Q4 sales were over $2.8 billion, an 8% year‑over‑year increase; full‑year 2025 sales reached $10.8 billion, up 4% versus 2024 — both all‑time records for the company.
Record Cash Flow and Strong Cash Conversion
Operating cash flow for Q4 was $544 million (up $124 million or +30% year‑over‑year). Free operating cash flow for 2025 was a record $734 million (up over $230 million year‑over‑year) and full‑year cash conversion was 100%, exceeding the 80% target.
Record Earnings Per Share and Returns to Shareholders
Adjusted diluted EPS for 2025 rose to $9.85 (+18% year‑over‑year). The company returned approximately $590 million to shareholders in 2025 (dividends and buybacks), increased annual dividends to $3.12 per share (+14%), raised the quarterly dividend to $0.87 (+24%), and repurchased $351 million of shares during the year.
Improved Leverage and Balance Sheet Strength
Net debt decreased by over $200 million during the quarter and the net debt/EBITDA leverage ratio improved from 1.3x to 1.1x, supporting continued shareholder returns and financial flexibility.
Outperformance Versus Light Vehicle Production (LVP)
Autoliv outperformed global LVP by ~3 percentage points in Q4, with particularly strong outperformance in rest of Asia (+11 pp) and India (outperformance >30 pp). Sales to Chinese OEMs surged nearly 40% in the quarter, and full‑year sales to Chinese OEMs grew 23%.
Operational Efficiency and Structural Cost Savings
Gross profit increased in Q4 by $22 million; direct labor productivity improvements and strategic initiatives (automation/digitalization) reduced direct production personnel costs by almost $700 million. Of the $130 million structural cost program, ~$100 million has been achieved with ~$30 million remaining.
Product & Technology Wins and Strategic Partnerships
Announced the first foldable steering wheel with Tensor for autonomous Robocar (targeted for volume production late 2026). Secured multiple new orders in advanced safety/electronics (pyro‑safety for 1,000V EVs, occupant safety systems, steering wheel ECUs, rear window inflatable airbags) and a strategic agreement in Qatar.
Full‑Year Profitability Improvement
Adjusted operating income for 2025 rose 11% to approximately $1.1 billion and adjusted operating margin improved to 10.3% (from 9.7% in 2024), demonstrating year‑over‑year margin progress despite headwinds.
Negative Updates
Quarterly Margin and Adjusted Operating Income Decline
Adjusted operating income in Q4 decreased 4% to $337 million and adjusted operating margin fell to 12.0%, down ~140 basis points year‑over‑year (driven by lower out‑of‑period compensation and lower customer RD&E reimbursement).
Unfavorable Regional Mix and Volatility
Global regional LVP mix was approximately 150 basis points unfavorable in Q4 (more than 100 bps worse than expected), driven by growth in lower‑content markets in Asia and inventory adjustments (notably in North America and Asia/China), which pressured content per vehicle.
Near‑Term Market Weakness and Q1 2026 Guidance
Q1 2026 is expected to be the weakest quarter: Chinese production expected to decline >10% in Q1 and Q1 global LVP expected to fall ~4% year‑over‑year (sequential LVP decline ~14%), with Q1 adjusted operating margin expected to decline significantly due to lower volumes, lower engineering income and higher D&A ratio.
Tariff and Raw Material Headwinds
Combination of unrecovered tariffs and the dilutive effect of recovered portions negatively impacted margins (~15 basis points in Q4 and ~20 basis points for the full year). Raw material costs are expected to be a larger headwind in 2026 (~$30 million gross impact vs ~$10 million in 2025), with gold and steel as the main contributors.
Higher RD&E Net Costs and SG&A Increase
RD&E net costs rose year‑over‑year in Q4 (timing of customer projects reduced engineering income) and SG&A increased by $12 million (personnel costs and negative FX translation), reducing short‑term profitability.
Trade Working Capital Increase
Trade working capital increased by $106 million versus prior year (accounts receivable +$243 million, accounts payable +$208 million, inventories +$72 million), driven mainly by higher sales and end‑of‑quarter volatility.
Industry Sourcing Uncertainty and Shorter Program Lifecycles
OEMs continue to reassess product plans amid geopolitical and technology uncertainty; industry sourcing remained at low levels in 2025, program lifecycles shortened and Chinese OEMs reduced average lifetime sales — factors that create near‑term ordering and mix uncertainty.
Potential Recall/Customer Issue (Monitoring)
Media reports of a Hyundai airbag recall surfaced during the quarter; Autoliv indicated it is cooperating with the customer and currently has no indication that its products are at fault, but the situation remains under review and could create risk if validated.
Company Guidance
Autoliv guided full‑year 2026 organic sales to be flat while global light‑vehicle production is expected to decline about 1%—implying Autoliv will outperform LVP by roughly 1 percentage point—with a roughly +1% net currency translation effect on sales; adjusted operating margin is targeted at about 10.5%–11.0%, operating cash flow around $1.2 billion, CapEx expected slightly higher than 2025 but below 5% of sales, and a tax rate of ~28% (guidance excludes capacity‑alignment and antitrust effects and assumes no material tariff/trade changes as of Jan 23, 2026). Management warned Q1 will be the weakest quarter (Q1 global LVP down ~4% YoY, ~1 million units, and down ~14% sequentially or ~3.3 million units, with China Q1 down >10%), and expects a significant Q1 margin decline due to lower call‑offs, lower engineering income and higher D&A (Q1 2025 included a $12M Russia sale benefit). Key headwinds for 2026 include higher raw‑material costs (gross impact ~ $30 million, largely gold and steel) and higher depreciation, while tailwinds will come from higher operational efficiency and structural cost savings (about $20 million of the remaining $30 million savings expected in 2026); overall management expects continued strong operating and free operating cash flow and sustained shareholder returns.Autoliv Financial Statement Overview
Summary
Strong multi-year recovery: revenue grew from $7.45B (2020) to $10.82B (2025) with meaningfully higher profitability (net margin ~6.8% and EBIT margin ~10.1% in 2025). Cash generation improved (OCF $1.16B; FCF $715M in 2025) with better cash conversion, but FCF has been volatile and balance-sheet flexibility is only moderate with debt near equity (D/E ~0.95).Income Statement
Revenue has grown from $7.45B (2020) to $10.82B (2025), with growth re-accelerating in 2025 after a flat 2024. Profitability has improved meaningfully versus earlier years: net margin expanded from ~2.5% (2020) to ~6.8% (2025), and operating profitability also stepped up (EBIT margin ~10.1% in 2025 vs ~4.9% in 2020). Gross margin has trended higher since 2022, but remains in a relatively tight band (~19% in 2025), leaving results somewhat exposed if costs rise or pricing weakens.78
Positive
Balance Sheet
Leverage is moderate: debt is $2.44B against $2.57B of equity in 2025 (debt-to-equity ~0.95), higher than 2022–2023 but improved versus 2020 (above 1.0). Equity has been relatively stable while assets rose to $8.64B in 2025, suggesting balance sheet expansion without outsized dilution. Returns on equity are strong (~28–29% in 2024–2025), but the upward drift in leverage in the most recent year and a debt load close to equity reduce financial flexibility if industry conditions soften.66
Positive
Cash Flow
Cash generation is solid and improving: operating cash flow increased from $713M (2022) to $1.16B (2025), while free cash flow rose to $715M in 2025 with strong growth versus 2024. Free cash flow covers a meaningful portion of earnings (about 62% of net income in 2025, up from ~45% in 2024), indicating improving earnings quality. However, free cash flow has been volatile over the period (notably weak in 2022), which is a risk for consistency in capital returns or deleveraging plans.73
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 10.81B | 10.39B | 10.47B | 8.84B | 8.23B |
| Gross Profit | 2.07B | 1.93B | 1.82B | 1.40B | 1.51B |
| EBITDA | 1.50B | 1.37B | 1.08B | 1.03B | 1.07B |
| Net Income | 735.00M | 646.00M | 488.00M | 423.00M | 435.00M |
Balance Sheet | |||||
| Total Assets | 8.64B | 7.80B | 8.33B | 7.72B | 7.54B |
| Cash, Cash Equivalents and Short-Term Investments | 604.00M | 330.00M | 498.00M | 594.00M | 969.00M |
| Total Debt | 2.44B | 2.07B | 2.04B | 1.92B | 2.14B |
| Total Liabilities | 6.06B | 5.52B | 5.76B | 5.09B | 4.89B |
| Stockholders Equity | 2.57B | 2.28B | 2.56B | 2.61B | 2.63B |
Cash Flow | |||||
| Free Cash Flow | 715.00M | 480.00M | 409.00M | 128.00M | 296.00M |
| Operating Cash Flow | 1.16B | 1.06B | 982.00M | 713.00M | 754.00M |
| Investing Cash Flow | -423.00M | -563.00M | -569.00M | -485.00M | -454.00M |
| Financing Cash Flow | -369.00M | -680.00M | -490.00M | -531.00M | -469.00M |
Autoliv Technical Analysis
Negative
118.52
Price Trends
123.66
Negative
120.95
Negative
117.39
Positive
Market Momentum
-0.96
Positive
37.17
Neutral
9.78
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALV, the sentiment is Negative. The current price of 118.52 is below the 20-day moving average (MA) of 123.44, below the 50-day MA of 123.66, and above the 200-day MA of 117.39, indicating a neutral trend. The MACD of -0.96 indicates Positive momentum. The RSI at 37.17 is Neutral, neither overbought nor oversold. The STOCH value of 9.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALV.
Autoliv Risk Analysis
Autoliv disclosed 44 risk factors in its most recent earnings report. Autoliv reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Autoliv Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.04B | 13.45 | 15.30% | 2.05% | 2.99% | -9.80% | |
72 Outperform | $6.66B | 16.10 | 9.21% | 2.63% | -1.90% | -13.86% | |
72 Outperform | $2.57B | 13.14 | 14.37% | 0.57% | -4.03% | -39.51% | |
71 Outperform | $8.85B | 12.40 | 30.32% | 2.60% | 0.84% | 26.17% | |
62 Neutral | $11.92B | 44.98 | 5.05% | 1.24% | 0.08% | -83.69% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
58 Neutral | $15.65B | 58.39 | 3.25% | ― | 2.16% | -85.91% |
* Consumer Cyclical Sector Average
ALV
Autoliv
118.52
25.69
27.67%
BWA
BorgWarner
57.57
29.06
101.93%
APTV
Aptiv
73.54
9.53
14.89%
GNTX
Gentex
23.40
-0.30
-1.27%
LEA
Lear
131.25
42.59
48.04%
VC
Visteon
95.67
11.96
14.29%
Autoliv Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Autoliv Posts Record 2025 Sales, Signals Moderation Ahead
Positive
Jan 30, 2026
On January 30, 2026, Autoliv reported record quarterly and full-year sales for the fourth quarter and full year 2025, with Q4 net sales rising 7.7% to $2.82 billion and organic growth of 4.2%, outpacing a 1.3% increase in global light vehicle production, especially through nearly 40% sales growth to Chinese OEMs and strong demand in India. Despite a 9.6% decline in Q4 operating income to $319 million and a slightly lower operating margin, profitability remained robust, supported by cost reductions and tariff cost recovery, driving record operating cash flow of $544 million for the quarter and $1.16 billion for the year, reduced leverage to 1.1x, increased dividends, and share repurchases, while management signaled a more moderate 2026 outlook with flat organic sales but solid margins, underscoring Autoliv’s strengthened financial position, improved Asian footprint, and continued focus on shareholder returns in a low-growth environment.
The most recent analyst rating on (ALV) stock is a Buy with a $145.00 price target. To see the full list of analyst forecasts on Autoliv stock, see the ALV Stock Forecast page.
Dividends
Autoliv Increases Quarterly Dividend by 2.4%
Positive
Nov 12, 2025
On November 10, 2025, Autoliv announced an increase in its quarterly dividend by 2.4% to $0.87 per share for the fourth quarter of 2025. The dividend will be distributed to common stockholders on December 10, 2025, and to Swedish Depository Receipt holders on December 11, 2025. This decision reflects Autoliv’s commitment to returning value to its shareholders, with an annualized total dividend of approximately $260 million, indicating strong financial health and confidence in future performance.
The most recent analyst rating on (ALV) stock is a Buy with a $130.00 price target. To see the full list of analyst forecasts on Autoliv stock, see the ALV Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.