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Dow Jones Newswires: Valeo shares slip on expectation of lower margins in 2022

Shares in Valeo SE
FR,
-6.23%

traded lower on Friday after the auto supplier warned that its margins would shrink this year before improving in 2025.

At 0901 GMT, shares in Valeo were down 5% at EUR22.44.

For 2022, Valeo guided for earnings before interest, taxes, depreciation and amortization to slip to 11.8%-12.3% of sales.

The French company guided for Ebitda to rise to about 14.5% of sales in 2025. For 2021, Valeo’s Ebitda stood at 13.4% of sales, the company said, confirming preliminary figures released in January.

Valeo’s 2022 Ebitda guidance is below a Vara consensus, partly because it includes the effect from its takeover of a joint venture with Siemens AG whereas analysts’ estimates didn’t, Jefferies analysts said. “However, guidance looks still a bit light,” they said.

As part of a set of targets through 2025 laid out Friday, Valeo said it expects sales to rise to about 27.5 billion euros ($30.78 billion) in 2025 on expectations that the automotive market will recover strongly and that it will be able to outperform it.

Write to Cristina Roca at cristina.roca@wsj.com

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