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Valeo (FR:FR)
:FR
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Valeo (FR) AI Stock Analysis

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FR:FR

Valeo

(LSE:FR)

Rating:73Outperform
Price Target:
€11.00
▲(4.07% Upside)
The overall stock score for Valeo is primarily driven by its strong financial performance and positive technical indicators. The company's solid revenue growth and efficient cost management contribute significantly to its financial health. Technical analysis supports a bullish outlook, although caution is advised due to potential approaching overbought conditions. The valuation is reasonable, further supporting a positive investment case.
Positive Factors
Cost Management
Valeo's 1H25 results were ahead of consensus, driven by good progress on cost management actions, with margins improving in all divisions.
Market Leadership
Valeo is a global leader in technologies for driver assistance, electrification, lighting, and the interior cabin experience, with a #1 market leadership in automotive cameras and other ADAS components.
Negative Factors
Market Risks
Key risks include EU/US exposure and slower-than-expected adoption of ADAS/AD/EVs.
Sales Guidance
FY25F sales guidance was cut due to FX/SoP volatility.

Valeo (FR) vs. iShares MSCI France ETF (EWQ)

Valeo Business Overview & Revenue Model

Company DescriptionValeo SE designs, produces, and sells components, systems, and services for automakers in France, other European countries, Africa, North America, South America, and Asia. The company operates through four segments: Comfort & Driving Assistance Systems, Powertrain Systems, Thermal Systems, and Visibility Systems. It offers parking and driving assistance products, such as ultrasonic sensors, radars, and cameras to detect obstacles around vehicles; intuitive control products; and a range of connectivity solutions from short-range to long-range connectivity, as well as develops systems that enable the integration of applications, such as car sharing services and remote parking systems. The company also provides powertrain systems, including electric powertrain systems for electric cars; torque converters, dual dry and wet clutches, and actuators that enable the automation of transmissions to reduce fuel consumption and enhance driving comfort; and clean engines for vehicles. In addition, it designs and manufactures systems, modules, and components to optimize thermal management of vehicles and passenger comfort in the cabin, including heating ventilation and air conditioning systems. Further, the company designs and produces lighting and wiper systems for drivers in various weather conditions. Additionally, it offers original equipment spares to auto manufacturers; and replacement parts and accessories to independent aftermarket for passenger cars and commercial vehicles. The company was incorporated in 1923 and is headquartered in Paris, France.
How the Company Makes MoneyValeo generates revenue primarily through the sale of automotive components and systems to original equipment manufacturers (OEMs) and the aftermarket. The company has a diversified revenue model that includes several key streams: direct sales of its products to car manufacturers, supply contracts for advanced driver assistance systems (ADAS), and thermal management solutions. Significant partnerships with major automotive brands enhance Valeo's market presence and contribute to its earnings, while ongoing investments in R&D aim to develop cutting-edge technologies that meet the evolving demands of the automotive sector, including electric and autonomous vehicles. Additionally, Valeo earns revenue from aftermarket sales, providing replacement parts and services to vehicle owners and service centers.

Valeo Financial Statement Overview

Summary
Valeo demonstrates a solid financial standing with positive trends in revenue growth, profitability, and cash generation. The company has effectively managed costs, leading to improved margins. While leverage has increased, it remains controlled. Continued focus on profitability and cash flow enhancement will be crucial for sustaining long-term growth and financial health.
Income Statement
75
Positive
Valeo has shown strong revenue growth over the years with a notable recovery from the 2020 downturn. The gross profit margin is healthy and improving, indicating effective cost management. The net profit margin is relatively low, but positive trends in EBIT and EBITDA margins suggest operational improvements. Overall, the income statement reflects a positive trajectory with room for enhanced profitability.
Balance Sheet
70
Positive
The company's debt-to-equity ratio has increased slightly, indicating higher leverage, but remains within industry norms. The return on equity shows moderate profitability. The equity ratio is stable, reflecting a balanced asset structure. The balance sheet indicates a sound financial position with manageable debt levels, although further equity strengthening could reduce leverage risks.
Cash Flow
68
Positive
Operating cash flow is strong, consistently exceeding net income, which is a positive indicator of cash generation efficiency. Free cash flow has grown, but the free cash flow to net income ratio suggests potential constraints on cash availability for reinvestment or debt reduction. Overall, cash flows are robust but could benefit from improved free cash flow margins.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue21.49B22.04B20.04B17.26B16.44B
Gross Profit4.08B3.95B2.58B2.29B1.49B
EBITDA2.63B2.55B2.35B2.36B979.00M
Net Income162.00M221.00M230.00M175.00M-1.09B
Balance Sheet
Total Assets21.66B21.76B22.03B18.84B18.85B
Cash, Cash Equivalents and Short-Term Investments3.15B3.14B3.41B2.48B3.05B
Total Debt7.04B7.07B7.28B5.83B6.08B
Total Liabilities17.14B17.40B17.30B14.24B14.76B
Stockholders Equity3.72B3.58B3.82B3.69B3.23B
Cash Flow
Free Cash Flow463.00M461.00M319.00M249.00M287.00M
Operating Cash Flow2.69B2.46B1.81B1.60B1.76B
Investing Cash Flow-1.95B-1.91B-1.93B-1.57B-1.65B
Financing Cash Flow-524.00M-788.00M962.00M-613.00M1.14B

Valeo Technical Analysis

Technical Analysis Sentiment
Positive
Last Price10.57
Price Trends
50DMA
10.01
Positive
100DMA
9.39
Positive
200DMA
9.24
Positive
Market Momentum
MACD
0.11
Positive
RSI
52.19
Neutral
STOCH
22.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:FR, the sentiment is Positive. The current price of 10.57 is above the 20-day moving average (MA) of 10.42, above the 50-day MA of 10.01, and above the 200-day MA of 9.24, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 52.19 is Neutral, neither overbought nor oversold. The STOCH value of 22.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:FR.

Valeo Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
73
Outperform
€2.51B20.113.67%3.97%-4.16%-48.55%
64
Neutral
$10.75B15.587.62%2.01%2.80%-14.32%
€2.10B10.39-11.30%
€1.82B29.056.49%
€211.82M8.716.09%3.78%
€1.84B11.497.91%
$25.59B15.408.49%4.21%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FR:FR
Valeo
10.57
1.89
21.72%
GB:0MGR
Forvia
10.98
2.15
24.35%
GB:0EKE
Lisi SA
40.15
12.45
44.95%
GB:0F8V
AKWEL SA
7.90
-2.00
-20.20%
GB:0NW1
OPmobility
13.06
4.87
59.46%
MGDDF
Compagnie Générale des Établissements Michelin
37.22
0.48
1.31%
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.Date of analysis: Jul 10, 2025