KeyBanc Downgrades Autoliv, Inc. (ALV) to Hold; Lack of Catalysts in Place with Limited EPS Upside

KeyBanc downgraded Autoliv, Inc. (NYSE: ALV) from Buy to Hold.

KeyBanc analyst says, "Following Autoliv Inc.'s 3Q11 earnings and subsequent conference call, we are downgrading the stock to HOLD based on our belief that: 1) there is potential downside to 4Q11 Consensus earnings expectations given the weaker than expected outlook; 2) ongoing supply chain disruptions in Thailand, potential for higher commodity costs and higher legal expenses limit the margin expansion opportunity in 2012; 3) lower production assumptions in addition to a return to traditional organic revenue growth rates limits the benefit of operating leverage on 2012 earnings; 4) ALV is likely to continue to generate free cash flow, funding opportunistic acquisitions and further dividend increases; and 5) while we acknowledge the attractiveness of the stock on a valuation basis, risks associated with the EU/DOJ investigation as well as a lack of near-term catalysts are offsetting factors in our view."

"...lowering our earnings estimates to $1.71 from $1.89 for 4Q11 (First Call $1.81), to $6.67 from $6.79 for 2011 (First Call consensus $6.84) and to $6.80 from $7.35 for 2012 (First Call consensus $6.90)."

For more ratings news on Autoliv, Inc. click here and for the rating history of Autoliv, Inc. click here.

Shares of Autoliv, Inc. closed at $55.76 yesterday.

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