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Valeo SA (EU) (VLEEY)
OTHER OTC:VLEEY
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Valeo SA (EU)
(OTC:VLEEY)
Rating:77Outperform
Price Target:
$6.50
▲(4.67% Upside)
Positive Factors
Revenue Recovery
The recovery in revenue indicates that Valeo is successfully navigating post-pandemic challenges, positioning itself for sustained growth in the automotive sector.
Cash Flow Generation
Strong operating cash flow supports Valeo's operational stability, allowing for reinvestment in growth initiatives and debt servicing, enhancing long-term resilience.
Gross Profit Margin Improvement
Improved gross profit margins reflect effective cost management and pricing strategies, which enhance Valeo's competitive position and profitability potential.
Negative Factors
High Leverage
High leverage can increase financial risk, limit flexibility, and strain cash flows, potentially impacting Valeo's ability to invest in future growth opportunities.
Low Net Profit Margin
Persistently low net profit margins suggest challenges in translating revenue into profit, which could hinder long-term profitability and shareholder returns.
Modest Free Cash Flow Growth
Modest growth in free cash flow may limit Valeo's ability to fund new projects or reduce debt, potentially constraining future strategic initiatives and financial flexibility.
Valeo SA (EU) (VLEEY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.02B
Dividend Yield3.92%
Average Volume (3M)484.00
Price to Earnings (P/E)21.9
Beta (1Y)1.14
Revenue Growth-3.62%
EPS Growth-48.12%
CountryUS
Employees106,100
SectorConsumer Cyclical
Sector Strength75
IndustryAuto - Parts
Share Statistics
EPS (TTM)0.25
Shares Outstanding489,267,000
10 Day Avg. Volume0
30 Day Avg. Volume484
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap2.79
Enterprise Value/Revenue0.39
Enterprise Value/Gross Profit2.06
Enterprise Value/Ebitda3.10
Forecast
1Y Price Target
$6.50Price Target Upside4.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering0
Valeo SA (EU) 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. Its key revenue streams include the supply of powertrain components, thermal management systems, visibility systems (such as wipers and lighting), and advanced driver-assistance systems (ADAS). The company benefits from long-term contracts with major automotive manufacturers, which provide a stable source of income. Additionally, Valeo has established strategic partnerships and collaborations with various automakers and technology firms to develop new technologies and enhance product offerings, thereby expanding its market reach and driving growth. The shift towards electrification and automation in the automotive sector also positions Valeo to capitalize on emerging trends, further contributing to its earnings.
Valeo SA (EU) Earnings Call Summary
Earnings Call Date:Jul 24, 2025
(Q4-2023)
| % Change Since: |
Next Earnings Date:Feb 19, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted successful completion of 2023 guidance, record order intake, and significant ESG progress, demonstrating strong operational performance. However, challenges remain in the Chinese market and Thermal business profitability, alongside high debt levels. The company plans strategic measures to address these issues, aiming for growth and improved margins in the coming years.Q4-2023 Updates
Positive Updates
Successful Completion of 2023 Guidance
Achieved 100% of 2023 guidance with sales of EUR 22 billion, an EBITDA of 12%, an operating margin of 3.8%, and a free cash flow of EUR 379 million.
Record Order Intake
Set a record for order intake in 2023 at almost EUR 35 billion, with more than half related to driving assistance system technologies, interior experience software-defined vehicle, and EUR 6 billion in High Voltage electrification.
ESG Progress
Achieved a 9% decrease in CO2 emissions in absolute terms and 20% in relative terms since 2019. Continued efforts in gender diversity and safety improvements.
Improved Financial Metrics
Valeo's net attributable income reached EUR 221 million, an increase of almost 50% compared to 2022 on an adjusted basis.
Negative Updates
Challenges in China
Underperformance in China due to the need to improve customer mix and reposition the local customer portfolio, with expectations for improvement in the second half of 2024.
Thermal Business Underperformance
Current low profitability in the Thermal division, which is expected to improve gradually with the merger of Powertrain and Thermal business groups.
High Debt Levels
Financial net debt stood at EUR 4 billion, stable compared with December 2022, with a leverage ratio at 1.5x.
Company Guidance
During the earnings call for Q4 2023, Valeo's management provided detailed guidance, projecting 2024 sales between EUR 22.5 billion and EUR 23.5 billion, with EBITDA expected in the range of 12.1% to 13.1%, and an operating margin between 4.0% and 5.0%. For 2025, they anticipate sales of EUR 24.5 billion to EUR 25.5 billion, EBITDA of 13.5% to 14.5%, and an operating margin of 5.5% to 6.5%. The company aims to generate around EUR 500 million in cash for 2024, targeting a free cash flow of approximately EUR 350 million after allocating EUR 150 million to exceptional self-help measures. For 2025, a free cash flow around EUR 650 million is anticipated after similar allocations. Valeo expects to achieve a leverage ratio reduction to 1x EBITDA by 2025. Additionally, the company highlighted their strategy to drive growth through cost reduction, order intake transformation, and a reinforced cash culture, emphasizing a cautious market approach with a 3% volume discount on S&P estimates for greater comfort in achieving these targets.Valeo SA (EU) Financial Statement Overview
Summary
Valeo SA shows steady revenue recovery and improved gross profit margin, but the net profit margin remains low. The balance sheet indicates high leverage, posing potential risks. Strong cash flow generation supports operational stability, but free cash flow growth is modest.Income Statement
Valeo SA's revenue shows a recovery trend following the dip in 2020, with a 7.7% growth from 2020 to 2021 and continued growth thereafter. Gross Profit Margin improved from 13.1% in 2020 to 19% in 2024. EBIT and EBITDA margins are stable, indicating efficient cost management. Net Profit Margin, however, remains low at 0.75% in 2024, signaling room for improvement in profitability.78
Positive
Balance Sheet
The Debt-to-Equity ratio is high at 1.89 in 2024, indicating a significant reliance on debt financing. Return on Equity improved from negative in 2020 to 4.35% in 2024, showing better utilization of equity. The Equity Ratio stands at 17.17%, suggesting a moderate level of equity financing compared to total assets.65
Positive
Cash Flow
Operating Cash Flow has been consistently strong, reaching €2.69 billion in 2024. Free Cash Flow improved slightly from 2023 to 2024. The Operating Cash Flow to Net Income ratio is robust, highlighting strong cash generation relative to net income. However, Free Cash Flow growth remains modest.74
Positive
| Breakdown | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 21.49B | 22.04B | 20.04B | 17.26B | 16.44B |
| Gross Profit | 4.08B | 3.95B | 2.58B | 2.29B | 1.49B |
| EBITDA | 2.72B | 2.66B | 2.35B | 2.36B | 979.00M |
| Net Income | 162.00M | 221.00M | 230.00M | 175.00M | -1.09B |
Balance Sheet | |||||
| Total Assets | 21.66B | 21.76B | 22.03B | 18.84B | 18.85B |
| Cash, Cash Equivalents and Short-Term Investments | 3.15B | 3.14B | 3.41B | 2.48B | 3.05B |
| Total Debt | 7.04B | 7.07B | 7.28B | 5.83B | 6.08B |
| Total Liabilities | 17.14B | 17.40B | 17.30B | 14.24B | 14.76B |
| Stockholders Equity | 3.72B | 3.58B | 3.82B | 3.69B | 3.23B |
Cash Flow | |||||
| Free Cash Flow | 463.00M | 461.00M | 319.00M | 249.00M | 287.00M |
| Operating Cash Flow | 2.69B | 2.46B | 1.81B | 1.60B | 1.76B |
| Investing Cash Flow | -1.95B | -1.91B | -1.93B | -1.57B | -1.65B |
| Financing Cash Flow | -524.00M | -788.00M | 962.00M | -613.00M | 1.14B |
Valeo SA (EU) Technical Analysis
Positive
6.21
Price Trends
5.87
Positive
5.45
Positive
5.15
Positive
Market Momentum
0.09
Positive
55.45
Neutral
88.92
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLEEY, the sentiment is Positive. The current price of 6.21 is above the 20-day moving average (MA) of 6.12, above the 50-day MA of 5.87, and above the 200-day MA of 5.15, indicating a bullish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 55.45 is Neutral, neither overbought nor oversold. The STOCH value of 88.92 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for VLEEY.
Valeo SA (EU) Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $9.63B | 13.72 | 29.99% | 2.35% | -0.98% | 21.64% | |
79 Outperform | $17.77B | 13.52 | 15.52% | ― | -2.47% | -43.12% | |
77 Outperform | $3.02B | 21.92 | 3.57% | 3.92% | -3.62% | -48.12% | |
76 Outperform | $5.81B | 12.65 | 9.51% | 2.82% | -3.12% | -8.23% | |
67 Neutral | $9.60B | 46.09 | 3.66% | 1.13% | -2.12% | -69.42% | |
66 Neutral | $6.15B | 15.88 | 16.38% | 1.71% | 2.43% | -1.25% | |
61 Neutral | $18.09B | 12.97 | -1.60% | 2.98% | 1.42% | -15.92% |
* Consumer Cyclical Sector Average
Performance Comparison
VLEEY
Valeo SA (EU)
6.21
1.16
22.97%
ALV
Autoliv
127.65
34.77
37.44%
BWA
BorgWarner
44.36
12.60
39.67%
APTV
Aptiv
83.72
14.77
21.42%
GNTX
Gentex
28.41
-0.21
-0.73%
LEA
Lear
109.18
7.65
7.53%
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.