Forvia (FRVIA.PA) Strong 1H results, FY26 guide unchanged, expect positive reaction

First-page research excerpt

Flash |

31 Jul 2026 01:47:51 ET │ 11 pages

Forvia (FRVIA.PA)

Strong 1H results, FY26 guide unchanged, expect positive reaction

CITI'S TAKE

Forvia reported 1H26 sales of €10.5bn, 1-2% above Citi/ VA Cons, Op

income of €632m, 5% ahead of Citi/cons, 6.0% margin vs. Citi/Cons 5.8%

and a strong 1H FCF of €432m (vs. €208m Citi and €171m Cons). 2Q26

sales of €5,374m, 3%/1% above Citi/Cons (organic -1.7% YoY, FX -0.5%

YoY). Forvia confirms FY26 guidance for sales in a €20bn – €21bn range

(Citi/Cons almost in-line with mid-point of guide at €20.5bn) with an OP

margin in a 6.0-6.5% range (Citi/Cons at 6.2%/6.1%) and net cash flow 3%

of sales (Citi/Cons at 3.1%/3.3%). With shares depressed vs YTD highs, we

expect a strong positive reaction to this beat across KPIs.

Conclusion - Forvia 1H26 results have delivered an positive surprise to consensus

despite still wide underperformance in China with margins in the guidance corridor

for FY26 already, FCF well ahead of consensus and management tone on the deleveraging, interiors sale process and order momentum all bullish. We would argue

on these strong results and with FY26 guidance confirmed the market should

reassess why shares trade ~35% below YTD highs at this time. We therefore expect a

strong positive reaction today (HSD) and see risk reward into 2H as attractive as BYD

momentum improves in China, EU registrations hold up, and self help at Forvia

continues to deliver margin upside and remains ~2 years ahead of OEMs on capacity

streamlining. We look for more details on recent drone business wins, on 3Q26 calloff trends, on potential 2027 cash returns given the on track de-leveraging glide

path, and for colour on any one time customer rebates in 1H26 FCF, which is well

ahead of our expectations. Reiterate BUY.

Buy / High Risk

Catalyst Watch: Upside, expires 07-AUG-26

Price (30 Jul 26 17:30)

Target price

Expected share price return

Expected dividend yield

Expected total return

Market Cap

Ross MacDonaldAC

Harald C Hendrikse

Soumava Banerjee