Forvia (FRVIA.PA): Deep Value Emerging: 30% FCFY increasingly compelling. Upgrade to Buy

研报英文原文证据摘录

Forvia (FRVIA.PA): Deep Value Emerging: 30% FCFY increasingly compelling. Upgrade to Buy

st-July). We also note recent BYD order data in China appears to be improving which could support

sentiment over summer if maintained (LINK). While this message may not drive net upgrades – consensus currently looks for

an FY26 EBIT margin of 6.3%/Sales €20.4bn – the lack of downgrades we think should allow for some retracing of the recent

underperformance. We open a 30 day positive catalyst watch on this basis, and upgrade to Buy/High Risk.

Model Estimates and Citi vs Cons — As shown below, we are broadly in-line with consensus on 1H26/FY26 estimates,

slightly ahead on FY26 margins at 6.3% vs Cons 6.1%. We are not arguing that consensus is overly bearish on margins at the

current levels. Instead, we think that valuations are currently overly punitive in the context of solid execution by management

over the past 12m on margin expansion, cost savings and asset disposals. With shares one of the worst performers since the

conflict, we take a simple view that a confirmation of the current guidance should be good enough to take shares higher.

Conclusion: Keeping our €12 price target, upgrading to Buy — We think the Value us hard to ignore at these levels. We

Upgrade to Buy and maintain our €12 price target, which is derived from 1.5% mid term and 0.5% terminal sales growth

assumption, 6.0% mid-term EBIT margin and 5.0% terminal EBIT margins with a WACC of 6.5%. We see current valuations art

Forvia, particularly on FCFY of 30%+, as good evidence that a lot of structural fears around the demand cycle and the EU

automotive production outlook are now priced-in; Forvia screens as one of the cheapest stocks in France and indeed Europe

on this basis.