On Friday, CFRA maintained a Buy rating on Autoliv, Inc. (NYSE:ALV) and increased the stock price target to $150 from $130. The firm's analyst highlighted a positive outlook for the automotive safety systems supplier, citing a robust first-quarter performance and strong financial health.
The rise in the 12-month price target is based on a 2025 price-to-earnings (P/E) ratio of 12.5 times, which is below Autoliv's historical five-year forward P/E of 16.8 times. The analyst also adjusted the earnings per share (EPS) estimates upward to $10.00 from $9.90 for 2024 and to $12.00 from $11.80 for 2025.
Autoliv reported a first-quarter adjusted EPS of $1.58, a 76% increase from the previous year's $0.90, surpassing the consensus estimate of $1.40. This earnings beat was attributed to better-than-expected sales and margins. Net sales grew by 5% to $2.62 billion, which was $60 million above consensus, and the adjusted operating margin expanded by 230 basis points to 7.6%.
Despite the current economic environment, Autoliv reiterated its guidance for 2024, expecting organic sales growth of around 5% and adjusted operating margins of 10.5%. CFRA believes that the company's organic growth forecast may be on the conservative side.
The analyst praised Autoliv for being well-positioned among auto suppliers and noted the company's solid balance sheet with net debt to EBITDA at 1.3 times. Moreover, the company's commitment to returning cash to shareholders was emphasized, with $160 million in buybacks completed in the first quarter of 2024, marking an increase from the total share repurchases of $352 million in 2023.
InvestingPro Insights
Following the positive assessment by CFRA, real-time data from InvestingPro further supports the optimistic outlook for Autoliv, Inc. (NYSE:ALV). With a market capitalization of $9.88 billion and a robust revenue growth of 18.47% over the last twelve months as of Q1 2023, Autoliv demonstrates significant financial strength.
Moreover, the company's commitment to shareholder returns is evidenced by a consistent dividend payout, having maintained dividend payments for 28 consecutive years, and a current dividend yield of 2.35%.
InvestingPro Tips indicate that while some analysts have revised their earnings expectations downwards for the upcoming period, the company is still expected to be profitable this year.
Autoliv's stock price is trading near its 52-week high, reflecting market confidence. For investors seeking stability, Autoliv's stock generally trades with low price volatility, which may be appealing in uncertain economic times. It is also worth noting that Autoliv operates with a moderate level of debt, which aligns with the analyst's comments on the company's solid balance sheet.
For those interested in a deeper analysis, InvestingPro offers additional tips on Autoliv, which can be accessed through the platform. By using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking further valuable insights to inform their investment decisions.
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