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Goldman Sachs Upgraded Autoliv to ‘Neutral’

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Nov. 25 2016, Published 1:17 p.m. ET

Price movement

Autoliv (ALV) has a market cap of $8.9 billion. It fell 1.1% and closed at $100.65 per share on November 23, 2016. The stock’s weekly, monthly, and YTD (year-to-date) price movements were 3.0%, 1.6%, and -17.6%, respectively, on the same day.

Autoliv is trading 3.9% above its 20-day moving average, 0.01% below its 50-day moving average, and 7.5% below its 200-day moving average.

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Related ETF and peers

The iShares Dow Jones US ETF (IYY) invests 0.04% of its holdings in Autoliv. IYY’s YTD price movement was 10.2% on November 23.

The market caps of Autoliv’s competitors are as follows:

  • Delphi Automotive (DLPH) – $18.1 billion
  • Magna International (MGA) – $15.7 billion
  • Gentex Corporation (GNTX) – $5.3 billion

Autoliv’s rating

On November 23, 2016, Goldman Sachs upgraded Autoliv’s rating to “neutral” from “sell.”

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Performance of Autoliv in 3Q16

Autoliv reported 3Q16 net sales of $2.5 billion—a rise of 13.6% compared to $2.2 billion in 3Q15. The company’s gross profit margin narrowed by 490 basis points and its operating margin narrowed by 60 basis points.

Its net income and EPS (earnings per share) rose to $135.5 million and $1.56, respectively, in 3Q16—compared to $99.1 million and $1.12, respectively, in 3Q15. It reported an adjusted EPS of $1.63 in 3Q16—a rise of 6.5% compared to 3Q15.

Autoliv’s cash and cash equivalents fell 11.3% and its inventories rose 12.3% between 4Q15 and 3Q16. Its current ratio and long-term debt-to-equity ratio fell to 1.7x and 0.46x, respectively, in 3Q16—compared to 1.8x and 0.53x, respectively, in 4Q15.

Quarterly dividend

Autoliv declared a quarterly dividend of $0.58 per share on its common stock. The dividend will be paid on March 2, 2017, to shareholders of record at the close of business on February 15, 2017.

Projections

Autoliv made the following projections for 4Q16:

  • flat organic sales growth
  • ~6% sales growth from mergers and acquisitions
  • adjusted operating margin of 9.0%—excluding costs for capacity alignments and antitrust-related matters

The company made the following projections for 2016:

  • organic sales growth of ~7%
  • ~5% sales growth from mergers and acquisitions
  • adjusted operating margin of more than 8.5%—excluding costs for capacity alignments and antitrust-related matters

In the next part, we’ll look at Kate Spade & Company (KATE).

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