Jefferies Starts Autoliv, Inc. (ALV) at Buy
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Jefferies initiates coverage on Autoliv, Inc. (NYSE: ALV) with a Buy rating and a price target of $112.00.
Analyst Ashik Kurian commented, "We like the near term growth prospects of ALV’s passive safety business and see further upside potential from the fall out of the Takata airbag recall issue. We do not share market’s increased pessimism of ALV’s active safety business. Autoliv’s Achilles heel of lack of operating leverage should improve post 2017, at a time when leverage is likely to be less stellar for other auto suppliers. With the valuation froth having come off over the last 6 months and with a more realistic 2017 margin expectation, we expect Autoliv to outperform its supplier peers in a slowing production growth environment. Autoliv has the unique combination of strong growth in a fairly mature portfolio of passive safety and thus has a strong free cash flow potential. We expect upside to 2017 margin expectations from FX transaction tailwind and also positive news flow around the Takata bid situation to be positive catalysts."
Shares of Autoliv, Inc. closed at $102.92 yesterday.
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