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Valeo: share hammered due to forecasts for 2018

(CercleFinance.com) - The Valeo share is in a spin this morning, falling over 9% on the Paris Stock Exchange.
At issue: not so much 2017 results, which were fairly dull, but rather the group's 2018 forecasts, which were more cautious than expected - both in terms of growth and operating profitability.

While the global auto market grew by around 2% in 2017, Valeo expects it to rise by 1.5% in 2018. In addition, after organic sales growth of 7% for OEM in 2017 (i.e. 5% more than the market over the year, but only 3 points in H2), Valeo is now targeting just 5% in 2018. Even though this would be accompanied by "an acceleration in H2, anticipating double-digit growth in 2019.

Lastly, the group's operating margin should remain stable this year, with the impact of the euro and commodity price changes being cited.

"Group's weak growth profile for 2018 was, however, a surprise, as well as negative margin evolution," analysts Bryan Garnier commented this morning.

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