Autoliv, Inc. (ALV) PT Lowered to $103 at Baird

Baird analyst Luke Junk lowered the price target on Autoliv, Inc. (NYSE: ALV) to $103.00 (from $111.00) while maintaining a Neutral rating.

The analyst commented: "ALV traded sharply lower post-2Q after reporting results that were well below expectations, as outsized LVP-related impacts in June along with adverse mix impacts in China sunk the quarter, while 2024 expectations were also reset overall. While ALV is controlling what they can control relative to the company’s unchanged mid-term margin targets, 2H24 margin expectations also moved lower nonetheless. Looking forward, we see a similar setup for 3Q24 fundamentally, amid incremental headwinds from widespread Europe auto production cuts, likely continued mix drags in China (cash for clunkers stimulus driving growth in lower-content vehicles), and flow-through of lower volume to margins with somewhat limited incremental/near-term offsets (offset mainly ongoing structural improvement in direct labor efficiency, incremental cost recovery capture). Accordingly, we now model 3Q24 sales down 5% both y/y and sequentially, with margins improved only moderately vs. 2Q24 (i.e., non-repeating of June-specific weakness), altogether driving our updated EPS estimates 5% below current FactSet consensus. We believe sentiment is also heavily negative into the print, however, leaving open the possibility of a less bad outcome even if results miss and guidance is lowered as we anticipate."

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