Schaeffler (SHA0) AI Stock Analysis

• Market Cap: €5.29B
• Dividend Yield: 4.46%
• Average Volume (3M): 734.59K
• Price to Earnings (P/E): 22.3
• Beta (1Y): 0.99
• Revenue Growth: 32.82%
• EPS Growth: -362.06%
• Country: DE
• Employees: 113,682
• Sector: Industrials
• Sector Strength: 74
• Industry: Auto - Parts
• EPS (TTM): -0.04
• Shares Outstanding: 944,884,640
• 10 Day Avg. Volume: 1,126,294
• 30 Day Avg. Volume: 734,591
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €4.91
• Price Target Upside: -12.01% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 55 Neutral
• Price Target: €5.50 ▼(-1.43% Downside)

Schaeffler's overall stock score reflects a company with strong revenue growth and positive technical indicators, but facing significant profitability challenges and high leverage. The attractive dividend yield partially offsets the negative P/E ratio. Improving profitability and managing debt are crucial for enhancing financial health.

Positive Factors

E-Mobility Development

E-Mobility is benefitting from higher volumes and good progress on operating expenses, as well as smoother launches.

E-Mobility Performance

E-Mobility results are more positive, supporting the breakeven trajectory.

Free Cash Flow

FCF is above consensus, which is a positive indicator for the company's financial health.

Negative Factors

EBIT Performance

EBIT is a 10% miss, driven by a weaker-than-expected B&IS, where margins declined 430bps sequentially.

Industry Comparison

The results are set against a backdrop of more upbeat updates in the auto supplier sector over the past few weeks, which may negatively impact Schaeffler's stock performance.

Stock Valuation

The stock is trading at premiums to EU peers, which could lead to a downward adjustment in share price.

Schaeffler Business Overview & Revenue Model

Company Description

Schaeffler AG, together with its subsidiaries, develops, manufactures, and sells components and system for industrial applications in Europe, the Americas, China, and the Asia Pacific. The Automotive Technologies division offers mechanical, mechatronic, and electronic components and systems for powertrain electrification used in passenger cars and commercial vehicles, such as electric motors, axle transmissions, axle drives, power electronics, hybrid modules, electromechanical and hydraulic actuators, and thermal management module; torque converters, hybrid dampers, clutches, variable valve train systems, valve-lash adjustment elements, balancer shafts, camshaft phasing systems, timing drives, and front end auxillary drives. This division provides rolling bearing application and products, such as wheel, ball, and needle roller bearings; and mechanical components and mechatronic systems for steering and other chassis applications, including Space Drive, a steer-by-wire system. The Automotive Aftermarket division offers components and repair solutions for light commercial vehicles, trucks and buses, and offroad sectors under the LuK, INA, and FAG brand names, as well as service for repair shops under the REPXPERT brand. The Industrial division develops and manufactures rotary and linear bearing solutions, drive technology components and systems, and service solutions, such as sensor-based condition monitoring systems. This division serves customers in the wind, raw materials, aerospace, rail, offroad, two wheelers, power transmission, and industrial automation sectors. The company was formerly known as INA Beteiligungsgesellschaft mit beschränkter Haftung and changed its name to Schaeffler AG in October 2014. The company was founded in 1946 and is headquartered in Herzogenaurach, Germany. Schaeffler AG is a subsidiary of IHO Verwaltungs GmbH.

How the Company Makes Money

Schaeffler generates revenue through the sale of its high-precision components and systems across its Automotive and Industrial segments. The Automotive sector contributes significantly to revenue, driven by demand for components used in traditional and electric vehicles. Key revenue streams include original equipment manufacturing (OEM) sales and aftermarket services. The Industrial sector also plays a crucial role, providing products for sectors such as manufacturing, aerospace, and renewable energy. Strategic partnerships with automotive manufacturers and investments in research and development to innovate new products further bolster its earnings. Additionally, Schaeffler's focus on sustainability and digitalization initiatives aims to enhance operational efficiency and open new revenue opportunities.

Schaeffler Financial Statement Overview

Summary

Schaeffler shows strong revenue growth and healthy cash flows, which support operations. However, profitability challenges and high leverage pose significant risks, with negative net income and high debt levels indicating potential financial instability.

Income Statement

Schaeffler's revenue has shown consistent growth over the years, with a TTM increase to 20,026 million EUR, representing a 10.1% growth from the previous year. However, the company is facing profitability challenges, as indicated by the negative net profit margin of -3.9% TTM. The gross profit margin stands at 20.1% TTM, which shows a slight decline compared to previous periods. Despite a decrease in EBIT, the EBITDA margin remains stable at 7.4% TTM due to controlled depreciation and amortization.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 1.67, indicating significant leverage. The equity ratio has decreased to 18.5% TTM, suggesting a potential risk due to higher liabilities compared to equity. Return on equity is negative at -19.8% TTM, which is concerning. The company's total assets have remained relatively stable, but the growing liabilities may pose a risk to financial stability.

Cash Flow

Schaeffler's cash flow performance is relatively strong, with a positive operating cash flow of 1,435 million EUR TTM. The free cash flow has grown by 4.2% TTM, indicating effective cash management despite the negative net income. The operating cash flow to net income ratio is favorable due to efficient operational performance, providing a buffer against profitability issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.76B	18.19B	16.31B	15.81B	13.85B	12.59B
Gross Profit	4.28B	3.83B	3.55B	3.58B	3.44B	2.86B
EBITDA	1.50B	1.47B	1.70B	1.96B	2.21B	732.00M
Net Income	-852.00M	-632.00M	310.00M	557.00M	756.00M	-428.00M
Balance Sheet
Total Assets	21.51B	21.37B	15.02B	14.28B	14.36B	13.51B
Cash, Cash Equivalents and Short-Term Investments	2.28B	1.11B	834.00M	908.00M	1.66B	1.61B
Total Debt	7.75B	6.60B	4.19B	3.50B	3.99B	4.24B
Total Liabilities	18.14B	17.40B	11.10B	10.14B	11.20B	11.49B
Stockholders Equity	3.24B	3.81B	3.77B	4.02B	3.05B	1.93B
Cash Flow
Free Cash Flow	418.00M	433.00M	410.00M	348.00M	605.00M	621.00M
Operating Cash Flow	1.41B	1.39B	1.35B	1.14B	1.28B	1.25B
Investing Cash Flow	-750.00M	-2.08B	-1.90B	-990.00M	-716.00M	-642.00M
Financing Cash Flow	827.00M	1.19B	276.00M	-891.00M	-527.00M	526.00M

Schaeffler Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 5.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DE:SHA0, the sentiment is Positive. The current price of 5.58 is above the 20-day moving average (MA) of 5.34, above the 50-day MA of 5.05, and above the 200-day MA of 4.27, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 59.46 is Neutral, neither overbought nor oversold. The STOCH value of 48.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DE:SHA0.

Schaeffler Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	64 Neutral	$10.73B	15.74	7.64%	2.01%	2.76%	-15.10%
SHA0	55 Neutral	€5.29B	22.28	-24.27%	4.46%	32.82%	-362.06%
0MG5	―	€293.67M	―	-23.03%	―	―	―
0R3U	―	€9.00B	46.71	6.30%	―	―	―
0O4N	―	€704.52M	14.12	10.72%	―	―	―
KBX	57 Neutral	€13.80B	32.70	14.67%	2.04%	-1.78%	-30.46%
CTTAF	―	$17.02B	10.60	14.83%	3.39%	―	―