Valeo Adjusts 2025 Expectations

By Andrea Figueras

Shares in Valeo took a hit after the company adjusted its expectations for 2025 amid cost-cutting measures.

Stock Movement

Trading at 0937 GMT showed shares down by 2.3% to EUR10.46, following an earlier increase of 8.8% during the session.

Revised Forecasts

Valeo now predicts sales ranging between 24.5 billion euros and 25.5 billion euros, compared to the previous estimate of around EUR27.5 billion. The operating margin outlook has also been revised to a range of 5.5% to 6.5%, down from the initial projection of approximately 6.5%.

Analyst Insights

Analysts from Citi pointed out the significance of achieving the target for the stock price to remain stable, emphasizing the uncertain macroeconomic environment.

Future Projections

Looking ahead to 2024, Valeo aims for revenue between EUR22.5 billion and EUR23.5 billion, with an operating margin expected to fall between 4% and 5%. Analysts at Deutsche Bank appreciated the company's detailed insights on both the 2024 and updated 2025 targets, anticipating consensus upgrades.

Cost-Cutting Measures

As part of the cost-saving initiatives, Valeo plans to eliminate 1,150 jobs globally, aiming for structural savings of EUR200 million annually. These adjustments are set to impact margins, with expected benefits starting to materialize in the second half of 2024.

Deutsche Bank highlighted that the cost reduction program could potentially push margins towards the lower end of the revised range.