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BofA raises Autoliv shares target on strong Q1 results

EditorEmilio Ghigini
Published 2024-04-29, 05:44 a/m
ALV
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On Monday, BofA Securities adjusted its outlook on Autoliv, Inc. (NYSE:ALV) shares, increasing the price target to $145 from $135 while reiterating a Buy rating.

The firm's analysis highlights Autoliv's Q1 revenue growth of 4.9% year-over-year, reaching $2.62 billion, which aligns with both BofA Securities' estimate and the consensus. This performance stands out against the backdrop of peers who have reported flat or slightly negative sales for the first quarter.

Autoliv's adjusted EBIT for the quarter was $199 million, surpassing expectations by 7%, with BofA Securities and consensus estimates previously set at $182 million and $186 million, respectively.

The EBIT margin of 7.6% also exceeded both BofA Securities' 7.0% projection and the consensus of 7.1%, topping the company's own initial guidance of around 7%. The firm attributes the strong EBIT to a higher rate of converting sales into profit and operational cost reductions, which added approximately $74 million.

Free cash flow (FCF) for the quarter came in at negative $19 million, slightly below the consensus expectation of positive $9 million. However, this included a substantial working capital absorption of $114 million and marked a $171 million year-over-year improvement. BofA Securities interprets this as an indication of Autoliv's ability to generate cash even during its seasonally weakest quarter.

The company's adjusted earnings per share (EPS) of $1.58 beat the BofA Securities and consensus estimate of $1.39 by 14%. Dividend per share (DPS) for the quarter was reported at $0.68, meeting expectations. Autoliv continues to demonstrate its commitment to shareholder returns, having repurchased and retired 1.37 million shares for $160 million as part of its $1.5 billion share buy-back plan in Q1.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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