Valeo shares: Price analysis before buying or selling

Can I receive dividends when I buy Valeo shares?

Yes

ISIN code: FR0013176526

Ticker: EPA: FR

Index or market: Euronext Paris

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Elements to consider before selling or buying Valeo shares

Analysis N°1

Of course, we will have to keep a close eye on the automotive market and on the number of vehicles ordered by customers, which will give us a good view of the company's growth.

Analysis N°2

It will also be necessary to closely follow the evolution of Valeo's sales in certain countries of the world where the automotive industry is booming and where growth is strong, such as China, which has become one of the group's major target markets.

Analysis N°3

Valeo's financial and statistical data will also be followed with interest, such as growth rates and profitability, as well as global economic growth in general.

Analysis N°4

Among the factors that influence the profitability of the Valeo Group are the price of raw materials and its evolution. You should therefore keep an eye on this market in order to follow the main trends that could have an impact on the company's production costs.

Analysis before buying or selling Valeo shares

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General presentation of Valeo

The French group Valéo is currently one of the largest designers, manufacturers and sellers of automotive parts and equipment. However, its activity can be divided into several main areas, which are :

Visibility systems such as lighting, signalling and wiping systems.
Thermal equipment with heating, air conditioning or compressors and engine coolers and oil exchangers.
Propulsion systems such as starters, alternators or transmission systems.
Finally, comfort and driving assistance systems with switching and detection systems or safety equipment such as keyless access systems, steering locks and others.

With no less than 186 production sites throughout the world, Valéo employs 114,000 people and serves the French, European, African, Asian and American markets.

Photo credits: ©foottoo/123RF.COM

The major competitors of Valeo

Before buying or selling Valeo shares, we propose that you deepen your knowledge of the sectoral environment in which the Valéo group operates, including a presentation of its main competitors. Here is a list of the largest companies in the automotive equipment sector which can take market share from Valéo.

Continental AG

First of all, the Continental group, which was founded in 1871, is a German automotive equipment manufacturer with its headquarters in Hanover. The group is primarily known for its tyres, but this multinational company also manufactures other automotive parts and specialises in rubber recycling.

Faurecia

Another direct competitor of Valéo is of course the French Faurecia group. It is an engineering and production group for automotive equipment and is responsible for developing, manufacturing and marketing equipment for car manufacturers, such as seats, interior systems with instrument panels, door panels, decorative elements and acoustic modules, emission control technologies, etc.

Plastic Omnium

Again, this is a French competitor of Valéo. This company is an industrial group created in 1946 by Pierre Burelle and controlled by his family. 10 billion and employs over 32,000 people. It owns and operates 131 production plants, 26 research and development centres and is present in 26 countries around the world. Plastic Omnium is also listed on the Paris stock exchange, in the Next 150 and CAC Mid 60 indices. The Company is also a member of the Automotive Platform and the European Association of Automotive Suppliers, CLEPA. Plastic Omnium is also a member of the hydrogen council.

Bosch

Another direct competitor of Valéo is Bosch, a German multinational founded by Robert Bosch in 1886. This group carries out several types of activity and is notably an equipment supplier for the automobile industry. It is also a manufacturer of power tools and household appliances, a specialist in industrial and building technology and packaging technology.

Magna International

This Canadian company specialises in automotive equipment and is a supplier to many drivers. It is based in Aurora, a northern suburb of Toronto, Ontario. The company currently employs more than 107,000 people and is present in 26 countries.

BASF

Finally, the German chemical group is also in competition with Valéo. It is the world's largest chemical group, which is active in the production of a variety of speciality chemicals and counts many car manufacturers among its customers. The group employs more than 34,000 people in the development, testing, manufacture and sale of several thousand products, including products for the automotive industry.

The major partners of Valeo

Finally, here are the recent partnerships set up by Valeo with other companies.

Safran

On March 27, 2015, Valeo and Safran presented a jointly developed autonomous car that combines the best of automotive and aerospace technologies.

Mobileye

In the same year, French automotive supplier Valeo and Israeli company Mobileye signed a technology partnership covering active safety as well as the autonomous car. In 2019, the group also signed a partnership agreement with the company Mobileeye as part of the future development and promotion of a new safety standard for autonomous vehicles based on the Responsibility-Sensitive Safety model.

Siemens

In 2016, Valeo announced its combination with Siemens to create a joint venture dedicated to electric propulsion systems.

Capgemini

Also in 2016, Valeo and Capgemini, one of the world's leading providers of consulting, IT and outsourcing services, announced the commercial launch of Mov'InBlue, a groundbreaking smart mobility solution for corporate fleets and vehicle rental companies.

NTT Domoco

In 2018, it was with NTT Domoco, Japan's leading mobile phone company, that Valeo set up a partnership regarding the development and sale of connectivity solutions for vehicles.

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The factors in favour of a rise in the Valeo share price:

Valeo has a number of strengths and weaknesses to consider when evaluating the company. These strengths and weaknesses can influence how the company responds to future challenges and threats. Here are some of the major factors to consider:

First of all, let's look at the advantages of this share, i.e. the strengths of this company that are likely to boost its share price:

Technological expertise: Valeo is recognised for its expertise in advanced automotive technologies, including autonomous driving, vehicle electrification and connectivity. This gives it a competitive edge in a rapidly evolving sector.
Growth potential: As a technology solutions provider to the automotive industry, Valeo is positioned to benefit from the growing trend towards vehicle electrification, autonomous driving and other industry innovations.
Diversified product portfolio: Valeo offers a wide range of products and solutions for automakers, covering areas such as lighting, thermal comfort, visibility and driver assistance systems. This diversification enables it to adapt to the changing needs of the automotive industry.
Global presence: Valeo benefits from an extensive global presence, with operations in many countries. This enables it to take advantage of growth opportunities in different markets and to reduce its dependence on any single geographic region.
Continuous innovation: Valeo is committed to active research and development to remain at the forefront of new automotive technologies. This capacity for innovation can strengthen the company's competitive position and drive long-term growth.
Strong partnerships: Valeo has established strategic partnerships with key players in the automotive industry, enabling it to benefit from synergies and collaborations to develop new technological solutions.
Presence in emerging markets: Valeo has successfully penetrated and expanded its presence in high-growth emerging markets such as China, India and other developing countries. This provides additional growth opportunities for the company.
Strong customer base: Valeo's customer base includes some of the world's leading automakers, providing long-term visibility and stability. The relationships established with these customers can foster long-term partnerships and growth opportunities.

The factors in favour of a drop in the Valeo share price:

Let's now find out what the major flaws and drawbacks of this stock are, and what factors are likely to have a negative influence on its share price:

Sensitivity to economic cycles: Like many companies in the automotive sector, Valeo is sensitive to global economic fluctuations. Periods of economic slowdown can lead to a fall in demand for new vehicles, which can have an impact on Valeo's revenues.
Dependence on automakers: Valeo is highly dependent on automaker orders, which can make it vulnerable to variations in its customers' supply policies and changes in partnerships.
Intense competition: The automotive industry is highly competitive, with many major players and constant innovation. Valeo faces intense competition, which can put pressure on its margins and market share.
Exposure to exchange rate fluctuations: As a global company, Valeo is exposed to fluctuations in exchange rates between different currencies. Unfavourable variations in exchange rates may affect the company's financial results.
Dependence on the traditional automotive industry: Although Valeo invests in emerging technologies, a large part of its revenues still come from the traditional automotive industry. The transition to new technologies may represent a challenge and uncertainty in the short term.
Risks of technological disruption: The automotive industry is constantly evolving, with the emergence of new technologies and new players on the market. Valeo faces the risk of being disrupted by competing technological innovations or of seeing its traditional business model disrupted.

It is important to take these advantages and disadvantages into account when evaluating Valeo. It is also advisable to carry out an in-depth analysis of the company, its sector of activity and market trends before buying or selling this share.

The information supplied here is only for indicative purposes and should not be used without the completion of a comprehensive and complete fundamental analysis of this asset notably taking into account exterior data, future publications and announcements and all fundamental events and news that could influence the strengths and weaknesses or make them more or less significant. This information does not in any way constitute recommendations relating to the completion of transactions or a solicitation to buy or sell an asset.

Frequently Asked Questions

How to read Valeo's financial statement?

You can follow the publication of the Valeo Group's financial results directly on the company's website or from a specific stock market news feed or site. As far as the latest published balance sheet is concerned, it is for the 2019 financial year. This one shows, among other things, a turnover of 19,124 million euros and a net result of 546 million euros. The current market capitalization (in 2020) of this company, is around 8,478 million euros.

In which countries are Valeo's major subsidiaries based?

As you probably already know, the Valeo group does not only operate in the French market. In fact, the company has several subsidiaries located all over the world, including one in Ireland, one in Germany, one in South Korea, one in Japan, one in Brazil and one in the United States. It is also likely that the company will create new subsidiaries in other countries as part of its expansion strategy.

What are the key figures to know about the Valeo share?

Several figures are interesting to know about the Valeo share. In particular, 113,600 is the number of employees, 33 is the number of countries in which the group is present, 186 is the number of production sites, 38 is the number of development centers and 15 is the number of distribution platforms.

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