Valeo Stock Poised For Growth As Earnings and Margins Recover: BofA

Key Points

* BofA analysts have upgraded Valeo to "Buy" from "Neutral," citing strong earnings and margin recovery. * Valeo's automotive technology business is benefiting from increased demand for electric vehicles. * The company's cost-cutting measures and efficiency initiatives are contributing to improved profitability.

BofA Upgrades Valeo Stock to "Buy" on Strong Earnings and Margin Recovery

BofA analysts have upgraded Valeo stock to "Buy" from "Neutral," citing the company's strong earnings and margin recovery. The analysts raised their price target on the stock to €30 from €26. Valeo, a French automotive supplier, reported strong third-quarter results that beat analysts' expectations. The company's revenue rose 16% year-over-year to €4.6 billion, while its adjusted operating profit margin improved by 1.5 percentage points to 10.5%. The analysts believe that Valeo is well-positioned to continue growing its earnings and margins in the coming years. The company's automotive technology business is benefiting from increased demand for electric vehicles, which require more sophisticated and expensive components. Valeo is also benefiting from its cost-cutting measures and efficiency initiatives, which are contributing to improved profitability. The analysts expect Valeo's revenue to grow by 7% in 2023 and by 6% in 2024. They also expect the company's adjusted operating profit margin to improve to 11.5% in 2023 and to 12.0% in 2024.

Conclusion

BofA analysts believe that Valeo stock is undervalued and has significant upside potential. They recommend that investors buy the stock at current levels.