Valeo SA (EU) (VLEEY) AI Stock Analysis

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Valeo SA (EU)

(Other OTC:VLEEY)

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Rating:57Neutral

Price Target:$7.50▲(20.52% Upside)

Action:reiterated

Date:10/23/26

The score is driven primarily by improving fundamentals (better margins, strong cash generation, and sharply reduced leverage) and a constructive earnings update (guidance reaffirmed, higher margin and free cash flow, strong order intake). These positives are tempered by weak technicals (below key moving averages with negative MACD) and remaining operational risks highlighted on the call (China weakness, elevated tax rate, and R&D impairment), leaving the overall profile moderately favorable but not high-confidence.

Positive Factors

Balance-sheet de-riskingMaterial deleveraging strengthens Valeo’s resilience through the automotive cycle and reduces financial risk. Combined with substantial liquidity, the improved balance sheet gives management greater flexibility to fund strategic programs, absorb volatility, and protect investment in growth technologies.

Negative Factors

China weaknessThe China decline shows that Valeo remains exposed to regional execution and demand differences, particularly with international OEMs. Weakness in a major automotive market can pressure factory utilization, product mix, and near-term revenue conversion even when Chinese-OEM order intake remains strong.

Valeo SA (EU) (VLEEY) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $2.98B
Dividend Yield: 4.21%
Average Volume (3M): 1,313
Price to Earnings (P/E): 13.6
Beta (1Y): 1.21
Revenue Growth: 5.15%
EPS Growth: 72.37%
Country: US
Employees: 100,216
Sector: Consumer Cyclical
Sector Strength: 61
Industry: Auto - Parts

Valeo SA (EU) Business Overview & Revenue Model

Company Description

Valeo SE, a prominent global supplier established in 1923 and headquartered in Paris, France, specializes in the design, production, and distribution of components, integrated systems, and related services for automotive manufacturers. Its market rea...

How the Company Makes Money

Valeo primarily makes money by selling automotive components, modules, and complete systems to original equipment manufacturers (OEMs) under supply contracts tied to specific vehicle platforms and production programs. Revenue is largely generated fro...

Valeo SA (EU) Earnings Call Summary

Earnings Call Date:Jul 21, 2026(Q2-2026)|% Change Since:-16.29%|Next Earnings Date:Feb 24, 2027

Earnings Call SentimentPositive

The call conveyed a predominantly positive operational and financial momentum: profitability and cash generation engines are running, evidenced by higher operating margin (5.0%), strong free cash flow (EUR 242m), net debt reduction and robust order intake (EUR 12.1bn). Division-level improvements, especially the POWER turnaround and high gross margin (20.7%), support the narrative. However, notable risks remain—China sales contraction, high effective tax rate (48%), an R&D impairment (EUR 85m), market volatility and supply/cost pressures—which temper near-term visibility. On balance, the positives (margin gains, cash, deleveraging, large orders and beyond-automotive pipeline) outweigh the negatives.

Positive Updates

Group Sales and Top-Line Stability

Group sales of EUR 10.4 billion in H1 '26, up 0.7% like-for-like, largely in line with guidance and with the group's Elevate '28 trajectory.

Negative Updates

China Sales Contraction

Sales in China contracted by 9% like-for-like in H1 '26, underperforming the market by 4 points due to weaker performance with international OEMs despite strong order intake skewed to Chinese OEMs.

Company Guidance

Valeo reaffirmed its full‑year 2026 guidance and said H2 operating margin and free cash flow should be at least in line with H1 (H1 sales €10.4bn; operating margin 5.0%, +50bp YoY; free cash flow after net financial interest €242m, >2x H1’25 and >50% of minimum full‑year guidance). They noted order intake €12.1bn (1.4x H1 OEM sales; POWER and BRAIN each ~>1/3, LIGHT 25%; China orders >80% with Chinese OEMs and a 5x book‑to‑bill), gross margin 20.7%, SG&A down 3% YoY, net R&D at 11% of sales (+2%) with €85m R&D impairment and an expected full‑year IFRS R&D impact <1pp, capitalized R&D -5%, tangible CapEx -12% to 3.6% of sales (aiming to stay below long‑term 4.5–5%), net debt reduced by ~€194m to €3.8bn (≈€350m vs a year ago) with leverage 1.2x adjusted EBITDA, liquidity €3.0bn cash + €1.6bn undrawn, and the group reiterated a return to growth from 2027 (all assuming stable conditions).

Valeo SA (EU) Financial Statement Overview

Summary

Financials are improving but still cyclical: revenue softened (~4.5% down in 2025 vs. 2024) while gross margin expanded to ~20% (from ~13% in 2021/2022). Balance sheet risk has improved materially with debt-to-equity down to ~0.19 in 2025, but net margin remains thin (~1%) and earnings durability is still modest. Cash generation supports the profile (operating cash flow ~€2.3B; free cash flow ~€528M in 2025) though conversion/consistency signals are mixed.

Income Statement

56Neutral

Balance Sheet

62Positive

Cash Flow

58Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	20.62B	20.90B	21.49B	22.04B	20.04B	17.26B
Gross Profit	4.28B	4.23B	4.08B	3.95B	2.58B	2.29B
EBITDA	2.93B	2.90B	2.72B	2.66B	2.35B	2.36B
Net Income	200.29M	192.11M	162.00M	221.00M	230.00M	175.00M
Balance Sheet
Total Assets	21.23B	20.27B	21.66B	21.76B	22.03B	18.84B
Cash, Cash Equivalents and Short-Term Investments	3.10B	2.48B	3.15B	3.14B	3.41B	2.42B
Total Debt	6.88B	6.44B	7.04B	6.99B	7.45B	5.88B
Total Liabilities	16.87B	16.20B	17.14B	17.40B	17.42B	14.34B
Stockholders Equity	3.40B	3.32B	3.72B	3.58B	3.82B	3.69B
Cash Flow
Free Cash Flow	1.52B	528.00M	463.00M	461.00M	319.00M	249.00M
Operating Cash Flow	2.30B	2.29B	2.69B	2.46B	1.81B	1.60B
Investing Cash Flow	-1.59B	-1.57B	-1.95B	-1.91B	-1.93B	-1.57B
Financing Cash Flow	-141.45M	-1.16B	-524.00M	-788.00M	862.00M	-641.00M

Valeo SA (EU) Technical Analysis

Technical Analysis SentimentNegative

Last Price6.22

Price Trends

50DMA7.92Negative

100DMA7.92Negative

200DMA7.34Negative

Market Momentum

MACD-0.48Positive

RSI29.34Positive

STOCH5.42Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For VLEEY, the sentiment is Negative. The current price of 6.22 is below the 20-day moving average (MA) of 7.32, below the 50-day MA of 7.92, and below the 200-day MA of 7.34, indicating a bearish trend. The MACD of -0.48 indicates Positive momentum. The RSI at 29.34 is Positive, neither overbought nor oversold. The STOCH value of 5.42 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for VLEEY.

Valeo SA (EU) Peers Comparison

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

VLEEY against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
BWA	60Neutral	$10.37B	21.60	8.61%	1.32%	0.42%	267.86%
VC	59Neutral	$1.81B	19.76	6.44%	1.91%	1.94%	-67.19%
VLEEY	57Neutral	$3.05B	13.60	5.98%	4.21%	5.15%	72.37%
DAN	53Neutral	$2.49B	-11.16	-16.24%	1.99%	-8.85%	-374.41%
GNTX	53Neutral	$4.19B	10.74	15.85%	2.42%	7.71%	9.67%
APTV	48Neutral	$9.12B	41.84	2.41%	―	-5.40%	-75.68%

* Consumer Cyclical Sector Average

Performance Comparison

VLEEY and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
VLEEY	Valeo, SA (EU)	6.22	-0.68	-9.86%
BWA	Borgwarner Inc	51.63	8.32	19.21%
DAN	Dana Incorporated	23.11	2.84	14.00%
APTV	Aptiv PLC	43.93	-25.34	-36.58%
GNTX	Gentex Corp	19.87	-2.93	-12.86%
VC	Visteon	73.32	-32.17	-30.50%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Oct 23, 2026

Valeo SA (EU) AI Stock Analysis