FURCF - Forvia: Sharply Increasing Margins Bode Well For 2024 And 2025

2024-06-04 10:30:00 ET

Summary

• Forvia has generated significant cost synergies from its acquisition of Hella and expects further synergy benefits in the future.
• The company reported strong financial results in 2023, with increased revenue and operating income.
• Forvia aims to achieve higher revenue, operating margin, and net profit in 2024 and 2025, which could make its current share price attractive.

Introduction

I have been keeping an eye on Forvia ( OTCPK:FURCF ) ( OTC:FAURY ) for several years now, as the parts supplier for the automotive sector has been working hard to expand its product offering and to increase its margins. I wasn’t a big fan of the acquisition of Hella, a German manufacturer of electronics and lighting components for cars, but Forvia already generated 190M EUR in annual cost synergies in 2023 and expects the total synergy benefits to come in around 350M EUR by the end of 2025. That would be pretty good considering the total size of the acquisition was less than 7B EUR....

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