The last seven or eight months have been brutal for tier one European auto suppliers. It's bad enough that component shortages have led OEMs to produce less than they'd like, but erratic start/stop schedules have wreaked havoc on supplier operations, and supply and labor challenges have done them no favors either.
The best thing I can probably say about Valeo's (OTCPK:VLEEY) performance since my last update is that a quick glance at Faurecia (OTC:FAURY) and Vitesco (VTSCY) shows that it could have been even worse, though all of these have underperformed American suppliers like Aptiv (APTV) and BorgWarner (BWA).
It's not smooth sailing ahead for Valeo just yet. While the company should be past the worst of the production disruptions, I expect the Street is still going to fret about losses tied to the EV development programs and the risk that EV component insourcing limits the long-term opportunity. These aren't new concerns, but there aren't many positives to offset them now. I believe that Valeo is materially undervalued here, but the company needs beat-and-raise reports (particularly on margins) to shift sentiment.
Follow the link for the full article:
Valeo Hammered On Sector-Wide Operational Challenges And Future EV Fears
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