UBS downgrades Autoliv as valuation leaves little near-term upside

Investing.com -- UBS downgraded Autoliv to Neutral from Buy, saying the stock’s strong run this year and full valuation leave little room for near-term gains, even as its long-term fundamentals remain sound.

The broker said Autoliv’s shares, up about 35% so far in 2025, are trading around 12–13 times forecast 2026 earnings roughly in line with their historical average and already reflect expectations for 10–15% annual EPS growth over 2026–27.

UBS raised its price target slightly to $124 from $123.

UBS said second-half challenges and year-end uncertainty warrant caution, with potential downside if tariffs hit global light vehicle production and demand.

Meeting full-year guidance would require a roughly 12.5% operating margin in the fourth quarter, a level UBS said is achievable but dependent on favorable market conditions.

Autoliv’s 2025 guidance calls for about 3% organic growth, a 10–10.5% adjusted EBIT margin, $1.2 billion in operating cash flow and a tax rate near 28%.

UBS sees those targets as attainable but leaves room for downward revisions if macro conditions weaken.

While the analysts continue to view Autoliv’s longer-term position as strong citing its powertrain-agnostic business model, pricing power and balance sheet they expect limited catalysts over the next three to six months. |

UBS said its earnings forecasts remain 2–3% below consensus, even after lifting 2025–27 EPS estimates by up to 8% on better revenue assumptions.

Autoliv has rerated toward fair value, and the path from here looks more balanced, according to UBS.

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