Valeo SE (FR.PA) | Investment Case

1. Company Snapshot

1.a. Company Description

Valeo SE designs, produces, and sells components, systems, and services for automakers in France, other European countries, Africa, North America, South America, and Asia.The company operates through four segments: Comfort & Driving Assistance Systems, Powertrain Systems, Thermal Systems, and Visibility Systems.It offers parking and driving assistance products, such as ultrasonic sensors, radars, and cameras to detect obstacles around vehicles; intuitive control products; and a range of connectivity solutions from short-range to long-range connectivity, as well as develops systems that enable the integration of applications, such as car sharing services and remote parking systems.

The company also provides powertrain systems, including electric powertrain systems for electric cars; torque converters, dual dry and wet clutches, and actuators that enable the automation of transmissions to reduce fuel consumption and enhance driving comfort; and clean engines for vehicles.In addition, it designs and manufactures systems, modules, and components to optimize thermal management of vehicles and passenger comfort in the cabin, including heating ventilation and air conditioning systems.Further, the company designs and produces lighting and wiper systems for drivers in various weather conditions.

Additionally, it offers original equipment spares to auto manufacturers; and replacement parts and accessories to independent aftermarket for passenger cars and commercial vehicles.The company was incorporated in 1923 and is headquartered in Paris, France.

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1.b. Last Insights on FR

Valeo's recent performance was driven by several positive factors. The company unveiled its "Elevate 2028" plan, aiming to steadily increase profit, generate higher cash, and return to sales growth by 2027. Valeo expects sales between €22-24 billion, an operating margin of 6-7%, and free cash flow after interest of at least €500 million by 2028. Additionally, the company completed its share buy-back program, acquiring 2,584,352 shares at an average price of €9.6736. Valeo also announced a new green bond issue for €500 million.

1.c. Company Highlights

Last Price	11.43
Change Percentage	0.66%
Open	11.31
Previous Close	11.36
Market Cap ( Millions)	2794
Volume	280784
Year High	12.85
Year Low	6.73
M A 50	11.13
M A 200	9.93

FCF Yield	54.73%
Dividend Yield	3.67%
ROE	3.62%
Debt / Equity	207.17%
Net Debt / EBIDTA	208.65%
Price To Book	0.89
Price Earnings Ratio	22.64
Price To FCF	1.83
Price To sales	0.13
EV / EBITDA	3.48

2. Transcript Summary

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3. NewsRoom

US 2026 Early Indicators AmLaw 200 Hourly Rate Report: Comprehensive Data Aids Law Firms, Corporations, and Consulting Firms in Making Informed Pricing and Strategy Decisions

Dec -01

Source:

Valeo Unveils Elevate 2028

Nov -20

Source:

Valeo - Exercise of Residual Maturity Call Option

Nov -18

Source:

Valeo (ENXTPA:FR): Exploring Valuation After Recent 23% Share Price Surge

Nov -15

Source:

Renault explores Chinese source for rare-earth-free EV motor – report

Nov -12

Source:

Valeo - Voting rights - October 2025

Nov -12

Source:

Exclusive-Renault seeking Chinese rare-earth-free motor supplier, sources say

Nov -10

Source:

2CRSi SA: Valeo and 2CRSi Announce Strategic Partnership to Develop Innovative Liquid Cooling Solutions for Edge Data Centers

Nov -04

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.30%)

6. Segments

Power

Expected Growth: 5.0%

The shift towards electric and hybrid vehicles is accelerating, driven by government regulations and consumer demand for more environmentally friendly options. Valeo's expertise in powertrain systems positions it well to capitalize on this trend, suggesting a growth rate above the global average.

Brain

Expected Growth: 6.0%

Autonomous driving and advanced driver assistance systems are key areas of innovation in the automotive sector, with significant investments being made by manufacturers. Valeo's leadership in this area is likely to result in higher-than-average growth as these technologies become more prevalent.

Light

Expected Growth: 3.5%

The lighting systems market is relatively mature, but ongoing innovations and the increasing demand for advanced lighting features in vehicles are expected to drive steady growth, slightly above the global average.

Other

Expected Growth: 3.3%

The 'Other' segment is more diversified and less directly exposed to the significant growth trends in electric vehicles, autonomy, and advanced lighting. As such, it is expected to grow in line with the global average, reflecting a stable and steady demand for various automotive components and accessories.

7. Detailed Products

Comfort and Visibility Systems

Valeo's Comfort and Visibility Systems provide innovative solutions for automotive lighting, wipers, and mirrors, enhancing driver comfort and visibility.

Powertrain Systems

Valeo's Powertrain Systems offer advanced solutions for transmission, engine management, and electrification, improving fuel efficiency and reducing emissions.

Thermal Systems

Valeo's Thermal Systems provide cooling and heating solutions for vehicles, ensuring optimal engine performance and passenger comfort.

Visibility Systems

Valeo's Visibility Systems offer advanced solutions for automotive lighting, wipers, and mirrors, enhancing driver visibility and safety.

Electrification and Autonomous Driving

Valeo's Electrification and Autonomous Driving solutions provide innovative technologies for electric vehicles, autonomous driving, and advanced driver-assistance systems.

8. Valeo SE's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Valeo SE is moderate due to the presence of alternative products and services in the automotive industry.

Bargaining Power Of Customers

The bargaining power of customers is low for Valeo SE due to the company's strong relationships with major automotive manufacturers and its ability to provide customized solutions.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for Valeo SE due to the presence of multiple suppliers in the market, but the company's large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants is low for Valeo SE due to the high barriers to entry in the automotive industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high for Valeo SE due to the presence of several established players in the automotive industry, leading to intense competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	64.56%
Debt Cost	6.47%
Equity Weight	35.44%
Equity Cost	12.43%
WACC	8.58%
Leverage	182.15%

11. Quality Control: Valeo SE passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Continental

A-Score: 4.7/10

Value: 7.7

Growth: 3.3

Quality: 4.6

Yield: 5.6

Momentum: 4.0

Volatility: 3.0

1-Year Total Return ->

Knorr-Bremse

A-Score: 4.5/10

Value: 3.8

Growth: 3.4

Quality: 5.2

Yield: 3.8

Momentum: 4.0

Volatility: 6.7

1-Year Total Return ->

Valeo

A-Score: 4.4/10

Value: 8.3

Growth: 3.8

Quality: 2.5

Yield: 4.4

Momentum: 5.5

Volatility: 2.0

1-Year Total Return ->

Forvia

A-Score: 4.1/10

Value: 9.6

Growth: 3.2

Quality: 1.5

Yield: 1.2

Momentum: 8.0

Volatility: 1.3

1-Year Total Return ->

Vitesco Technologies

A-Score: 3.5/10

Value: 7.0

Growth: 3.6

Quality: 4.3

Yield: 0.0

Momentum: 4.0

Volatility: 2.3

1-Year Total Return ->

Adient

A-Score: 3.5/10

Value: 8.2

Growth: 3.6

Quality: 1.5

Yield: 0.0

Momentum: 6.0

Volatility: 1.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-8.73%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.58%

Valeo SE - FR0013176526

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on FR

1.c. Company Highlights

Lower Quality

Weak Momentum

Cheaper

More Volatile

Earnings Miss

Earnings Beats

Revenues Beats

Fairly Valued

Medium Volatility

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.30%)

6. Segments

Power

Expected Growth: 5.0%

Brain

Expected Growth: 6.0%

Light

Expected Growth: 3.5%

Other

Expected Growth: 3.3%

7. Detailed Products

Comfort and Visibility Systems

Powertrain Systems

Thermal Systems

Visibility Systems

Electrification and Autonomous Driving

8. Valeo SE's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Valeo SE passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

11.43$

Current Price

11.43$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA