Valeo: share jumps, as BofA bets on a turnaround

(CercleFinance.com) - Valeo shares rebounded on the Paris Bourse on Thursday to post one of the strongest gains on the SBF 120, with Bank of America believing that the automotive supplier is successfully turning around its business.


At noon, the stock was up 5.5%, while the SBF 120 was up 0.7% at the same time, although was still trading at its lowest levels since 2010.

In a note released this morning, BofA said it had raised its recommendation on the stock from 'neutral' to 'buy', with a target price raised from E12 to E14.

The company's financial performance is aligning with its commercial successes, and the quality of its results is at an 'inflection point', according to the broker.

The analyst believes that cost-cutting measures, reduced R&D spending and better contract negotiation should also lead to margin appreciation between now and 2025.

BofA also points out that the stock is currently trading 30% below its historical valuation levels.


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