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Autoliv Inc ALV

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Morningstar’s Analysis

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Autoliv's Q4 Results Significantly Outperform Market; Maintaining $85 Fair Value Estimate

Richard Hilgert Senior Equity Analyst

Analyst Note

| Richard Hilgert |

Narrow-moat Autoliv, supplier of air bags, seat belts, and steering wheels to the global auto industry, reported fourth-quarter earnings per share before special items of $2.19, $0.26 better than the FactSet sell-side consensus estimate of $1.93 and $0.35 ahead of the $1.84 reported last year. Revenue was 15% higher than the year-ago period, up $326 million to $2.5 billion. Excluding the positive currency effect, organic revenue was up 13%, significantly outperforming a roughly 2% increase in global light-vehicle production by nearly 11 percentage points with all major regions contributing to the outperformance. Autoliv stock was bid 5% higher on the results and on management’s positive 2021 outlook. The 3-star-rated shares currently trade at a 10% premium to our $85 fair value estimate.

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Company Profile

Business Description

Autoliv is the global leader in passive safety components and systems for the auto industry. Products include seat belts, frontal air bags, side-impact air bags, air bag inflators, and steering wheels. The Renault-Nissan-Mitsubishi alliance is the company's largest customer at 16% of 2019 revenue, with Volkswagen and Honda accounting for 10% each. At 36% of 2019 revenue, the Americas was Autoliv's geographic region, followed by Europe at 31%. China and Japan each accounted for 11% of 2019 revenue.

Klarabergsviadukten 70, P.O. Box 70381, Section B7
Stockholm, SE-107 24
T +46 858720600
Sector Consumer Cyclical
Industry Auto Parts
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 68,000