Affärsvärlden gives a Buy rating to automotive safety company Autoliv despite risks of declining vehicle production and pressured margins.
Global Mobility expects vehicle production to decline by 4.5 percent globally and 9 percent in China during the fourth quarter. In a pessimistic scenario, Affärsvärlden sees downside of approximately 30 percent at a 7 percent operating margin and a valuation of 8 times EV/EBIT.
The newspaper believes Autoliv will struggle to reach a 12 percent margin, but sees support from an attractive valuation, growing Chinese and Indian customers, and share buybacks.
“We believe the valuation is attractive for a world-leading company in its industry. And the share buybacks lift earnings per share even if growth is low going forward,” it says.
