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CLSA Gives Autoliv a ‘Sell’ Rating

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Price movement

Autoliv (ALV) has a market cap of $10.1 billion. It rose 0.66% to close at $113.90 per share on January 3, 2017. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 2.2%, 8.2%, and 0.66%, respectively, on the same day.

ALV is trading 3.7% above its 20-day moving average, 10.6% above its 50-day moving average, and 4.6% above 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. The YTD price movement of IYY was 0.74% on January 3.

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

  • Delphi Automotive (DLPH) — $18.3 billion
  • Magna International (MGA) — $17.1 billion
  • Gentex Corporation (GNTX) — $5.9 billion

Autoliv’s rating

On January 3, 2017, CLSA initiated its coverage of Autoliv with a “sell” rating and set the stock’s price target at $97.00 per share.

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Performance of Autoliv in 3Q16

Autoliv (ALV) 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 490 basis points, and its operating margin narrowed 60 basis points.

Autoliv’s 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 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.

Quarterly dividend

Autoliv (ALV) 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 (ALV) made the following projections for 4Q16:

  • flat organic sales growth
  • 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 ~7.0%
  • adjusted operating margin of more than 8.5%, excluding costs for capacity alignments and antitrust-related matters

Now, we’ll discuss PACCAR (PCAR).

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