VNE - Veoneer -7% after Credit Suisse warns on long path to profitability

Credit Suisse drops Veoneer (VNE) to an Underperform rating from Neutral."VNE benefits as the supplier in our coverage with the highest exposure to the high-growth active safety product area. However, with the stock tripling from its COVID-19 depths, we believe the current valuation does not adequately reflect key risks: long path to profitability/cash flow breakeven, dilution related to potential future cash raise, questions on future revenue outlook," warns analyst Dan Levy.Levy sees a long path to profitability for Veoneer and continued cash burn that could prompt a capital raise."With COVID dampening launch activity and the industry volume outlook, a lower revenue outlook combined with elevated RD&E expense implies a long path to breakeven – we only expect VNE to reach EBIT breakeven in 2025. And with continued cash burn, we believe VNE will likely need to pursue a capital raise – which would likely press the stock."Shares of Veoneer are down 7.33% premarket.The

For further details see:

Veoneer -7% after Credit Suisse warns on long path to profitability