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UBS upgrades this manufacturer of seatbelts and airbags as a ‘growth safe haven story’

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Autoliv, a Swedish company that manufactures safety products such as seatbelts, airbags, and steering wheels, has caught the attention of UBS due to its strong margins, revenue growth, and insulation from automotive market challenges. UBS analyst Juan Perez-Carrascosa recently upgraded Autoliv’s stock rating to buy from neutral and raised its price target by 38% to $141. This new target suggests a 12% upside potential for Autoliv, which has already seen significant gains in 2023 and 2024. Despite trading at a premium compared to its peers, Autoliv still remains below its historical multiples, making it an attractive investment opportunity.

One of the main reasons for UBS’s favorable outlook on Autoliv is its ability to weather short-term industry pressures such as electric vehicle penetration, intense capital allocation, and underexposure to the Chinese market. Autoliv’s strong financial performance, healthy free cash flow, and robust balance sheet position it well to outperform its competitors and navigate challenges within the automotive industry. This makes Autoliv a “growth safe haven story” according to UBS, with potential for continued growth in the coming years.

In 2023, Autoliv saw its stock price soar by 44%, and in 2024, it has already climbed more than 14%. Despite these gains, UBS believes that there is still room for further upside in Autoliv’s stock price. The company’s strong equity story, both in absolute and relative terms, combined with its historical multiples below current levels, make it an attractive investment option for investors looking for long-term growth potential in the automotive sector.

While many companies in the automotive industry are facing challenges such as slow production and stalling electric vehicle penetration, Autoliv’s unique positioning allows it to stand out as a leader in safety products. With a focus on innovation and quality, Autoliv is well-equipped to continue outperforming its peers and delivering value to its shareholders. As a result, UBS believes that Autoliv is in a strong position to navigate the broader headwinds facing the automotive industry and maintain its growth trajectory in the years to come.

Overall, UBS’s upgrade of Autoliv’s stock rating and price target reflects the firm’s confidence in the company’s ability to deliver strong financial performance and outperform its competitors in the automotive industry. Autoliv’s solid equity story, combined with its insulation from short-term industry challenges, make it a compelling investment option for investors seeking growth potential in a stable and innovative company. With a track record of success and a focus on quality and safety, Autoliv is well-positioned to continue delivering value to its shareholders and maintaining its growth trajectory in the future.

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