Forvia (FRVIA.PA): Lack of share price support despite very solid 1H26 is hard to reconcile - Reiterate Buy

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31 Jul 2026 10:43:50 ET │ 11 pages

Forvia (FRVIA.PA)

Lack of share price support despite very solid 1H26 is hard to reconcile Reiterate Buy

CITI'S TAKE

Headwinds for supplier stocks are well understood; Western OEM

volumes are challenged, R&D intensity has been too high, restructuring

has limited cash-returns and Chinese entrants/OEM in-housing risks

have been seen as a threat to moats. Beyond being powertrain agnostic,

one of the key signals of "Investibility" for suppliers has been balance

sheet health. Forvia has been a good case study for this; shares have

broadly traded up when leverage has been falling, sold off when leverage

has been rising. This relationship feels broken based on price action post

2Q26 results. Management struck a confident tone, confirmed FY26

guidance fully and delivered the best semester of de-leveraging in years,

with net debt reduced €0.5bn in 1H26, with more to on the interior sale

process. Despite this execution, shares are c.5% lower today. We reiterate

our Buy rating and our view that further de-leveraging will, eventually,

unlock significant upside for equity holders.

Buy / High Risk

Catalyst Watch: Upside, expires 07-AUG-26

Price (31 Jul 26 13:39)

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Ross MacDonaldAC