Faurecia: 'the last mile is the hardest,' Bryan Garnier says
(CercleFinance.com) - Returning from a meeting with Faurecia's CFO, broker Bryan, Garnier & Co.
has confirmed its "neutral" rating on the stock of the French automotive supplier, for which it maintains a target price of 64 euros.
Admittedly, Faurecia is confident, "for good reasons" in its forecasts for 2018, which include an EPS estimate of five euros. Analysts believe that this figure, which it announced at its investor day of 2016, is cautious, with the consensus currently expecting 5.35 euros. However, be careful about negative FX factors, the broker warns in its report.
Faurecia also pretty much convinced in its ability to post - again in 2018 - an operating margin of over 7%, and thus approach the best elements of the sector. The main factors are the increasing automation of factories, restructuring, and a "strict" pricing policy in Latin America.
This may be so; although the Peugeot's subsidiary has managed to increase its margin from 3% to 6.9%, at its investor day of 15 May it will announce its targets for 2020 and 2022. From this viewpoint, we should be cautious: according to analysts the effort required to break the 8% mark will be much more difficult. Moreover, this rate should not, according to Bryan Garnier, be reached before 2022. This represents an improvement of 20 basis points p.a. between 2017 and 2022, against 80 points p.a. between 2012 and 2017.
In short, according to the broker, the race is not over, but the last mile is still the hardest, which prefers Valeo in this sector.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
has confirmed its "neutral" rating on the stock of the French automotive supplier, for which it maintains a target price of 64 euros.
Admittedly, Faurecia is confident, "for good reasons" in its forecasts for 2018, which include an EPS estimate of five euros. Analysts believe that this figure, which it announced at its investor day of 2016, is cautious, with the consensus currently expecting 5.35 euros. However, be careful about negative FX factors, the broker warns in its report.
Faurecia also pretty much convinced in its ability to post - again in 2018 - an operating margin of over 7%, and thus approach the best elements of the sector. The main factors are the increasing automation of factories, restructuring, and a "strict" pricing policy in Latin America.
This may be so; although the Peugeot's subsidiary has managed to increase its margin from 3% to 6.9%, at its investor day of 15 May it will announce its targets for 2020 and 2022. From this viewpoint, we should be cautious: according to analysts the effort required to break the 8% mark will be much more difficult. Moreover, this rate should not, according to Bryan Garnier, be reached before 2022. This represents an improvement of 20 basis points p.a. between 2017 and 2022, against 80 points p.a. between 2012 and 2017.
In short, according to the broker, the race is not over, but the last mile is still the hardest, which prefers Valeo in this sector.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.