Valeo SA (EU) (VLEEY) AI Stock Analysis

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Valeo SA (EU)

(OTC:VLEEY)

Rating:75Outperform

Price Target:

$6.00

▲(15.38%Upside)

Valeo SA shows a positive recovery in financial performance with strong cash flows and improving profitability metrics, despite high leverage. The technical analysis supports a bullish outlook, with the stock trading above key moving averages. Valuation is reasonable with a fair P/E ratio and an attractive dividend yield, making the stock appealing to investors.

Valeo SA (EU) (VLEEY) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.53B

Dividend Yield4.46%

Average Volume (3M)5.61K

Price to Earnings (P/E)14.4

Beta (1Y)1.18

Revenue Growth-2.45%

EPS Growth-26.83%

CountryUS

Employees106,100

SectorConsumer Cyclical

Sector Strength56

IndustryAuto - Parts

Share Statistics

EPS (TTM)-0.71

Shares Outstanding489,267,000

10 Day Avg. Volume0

30 Day Avg. Volume5,607

Financial Highlights & Ratios

PEG Ratio-1.26

Price to Book (P/B)0.52

Price to Sales (P/S)0.00

P/FCF Ratio4.74

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

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 SA generates revenue primarily through the sale of automotive components and systems to OEMs and the aftermarket. The company's key revenue streams include the sale of products related to its four business segments: Comfort & Driving Assistance Systems, Powertrain Systems, Thermal Systems, and Visibility Systems. These sales are driven by the demand for automotive innovation, particularly in areas such as vehicle electrification, autonomous driving technologies, and energy efficiency. Valeo benefits from partnerships and collaborations with leading automotive manufacturers, enabling it to integrate its systems into a wide range of vehicle platforms. Additionally, the company's focus on research and development helps maintain its competitive edge and ability to capture market trends, further contributing to its revenue generation.

Valeo SA (EU) Earnings Call Summary

Earnings Call Date:Feb 27, 2025

(Q4-2023)

% Change Since: -10.65%|

Next Earnings Date:Jul 24, 2025

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 demonstrates a steady recovery in revenue and profitability post-2020. Revenue growth and improved gross margins are positive, but the net profit margin remains low at 0.75%. The balance sheet shows high leverage with a Debt-to-Equity ratio of 1.89, which is a concern. However, strong operating cash flow supports operational stability.

Income Statement

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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
	EBIT
919.00M	838.00M	468.00M	499.00M	-522.00M
	EBITDA
2.72B	2.66B	2.35B	2.36B	979.00M
	Net Income Common Stockholders
162.00M	221.00M	230.00M	175.00M	-1.09B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.15B	3.14B	3.41B	2.48B	3.05B
	Total Assets
21.66B	21.76B	22.03B	18.84B	18.85B
	Total Debt
7.04B	7.07B	7.28B	5.83B	6.08B
	Net Debt
3.88B	4.05B	3.95B	3.41B	3.13B
	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

Technical Analysis Sentiment

Positive

Last Price5.20

Price Trends

50DMA

4.87

Positive

100DMA

5.04

Positive

200DMA

4.94

Positive

Market Momentum

MACD

0.07

Positive

RSI

54.03

Neutral

STOCH

75.65

Neutral

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 5.2 is above the 20-day moving average (MA) of 5.14, above the 50-day MA of 4.87, and above the 200-day MA of 4.94, indicating a bullish trend. The MACD of 0.07 indicates Positive momentum. The RSI at 54.03 is Neutral, neither overbought nor oversold. The STOCH value of 75.65 is Neutral, 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 (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
APTV	79 Outperform	$14.72B	11.21	15.52%	―	-2.47%	-43.12%
BWA	76 Outperform	$7.33B	26.82	5.38%	1.32%	-8.22%	-52.61%
VLEEY	75 Outperform	$2.53B	14.43	4.49%	4.46%	-2.45%	-26.83%
LEA	75 Outperform	$4.88B	10.70	10.00%	3.37%	-3.15%	-6.70%
ALV	75 Outperform	$8.53B	12.71	28.71%	2.54%	-2.29%	35.00%
GNTX	66 Neutral	$4.82B	12.57	15.90%	2.24%	-1.66%	-9.20%
Sector *	62 Neutral	$6.80B	11.08	2.79%	5.80%	2.68%	-24.86%

* Consumer Cyclical Sector Average

Performance Comparison

VLEEY

Valeo SA (EU)

5.20

-0.05

-0.95%

ALV

Autoliv

110.30

6.60

6.36%

BWA

BorgWarner

33.30

0.61

1.87%

APTV

Aptiv

67.66

-5.59

-7.63%

GNTX

Gentex

21.39

-11.71

-35.38%

LEA

Lear

91.26

-19.78

-17.81%

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.