VLEEF - Valeo: Looks Good But Watch Out For EV Hopes
2024-04-04 21:18:51 ET
Summary
- Valeo has a great CDA segment that should creep up in margins without much problem. Its economics are also fundamentally better, so we like them creeping up in the mix.
- The issue is that the EV opportunity is in question.
- We think that the dynamics in the EV market will be the clear catalyst for a major uptick in the stock. Return potential is high if EV demand resumes.
- The issue is that it isn't a given that it will. If it does, forward FCF projections mean more than 20% forward FCFY at today's prices. Objectively attractive.
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Valeo: Looks Good, But Watch Out For EV Hopes