Dowlais Group shares surge on strong trading update

Investing.com -- Dowlais Group (LON:DWL ) shares surged by more than 13% on Wednesday after the company reported that its year-to-date performance was in line with expectations.

Dowlais reported a 6.1% decline in organic sales through October, performing somewhat better than anticipated given the tough market. 

The automotive division, facing ongoing pressure, showed resilience with a 7% drop in constant currency terms, a bit more favorable than projections.

Despite the revenue dip, Dowlais managed to hold margins relatively steady at 6.1% year-to-date. 

The company’s FY outlook remains unchanged with mid- to high-single-digit revenue decline prediction and adjusted operating margin in the range of 6.0% to 7.0%.

Dowlais Group continues to face challenging market conditions. However, RBC Capital Markets analysts maintain a positive long-term outlook, believing the company is well-positioned to capitalize on the EV transition. 

They anticipate Dowlais to outperform the broader auto market and significantly boost operating margins, driven by its dominant position in sideshafts.

Source: Investing.com