Valeo shares plunge 10% after 2024 sales forecast cut amid weak EV demand

Investing.com -- Shares of Valeo (EPA:VLOF ) sank over 10% on Friday after it reported a reduction in its 2024 sales forecast, expecting  €21.3 billion instead of the previously estimated €22 billion. 

This revision follows a challenging third quarter, marked by lower-than-expected demand in high-voltage electric components and broader market declines, which drove a 5% year-over-year drop in quarterly sales to €4.97 billion. 

The company’s original equipment sales for the quarter also fell by 2% on a like-for-like basis, though they outperformed overall automotive production by 3 percentage points.

Geographically, Valeo's performance showed notable variance. In Europe and Africa, original equipment sales outpaced regional automotive production by 6 points, driven by gains in traditional powertrain products, and the BRAIN division’s advanced driver-assistance systems and display technologies. 

However, in North America, sales lagged, trailing production by 1 percentage point despite strong performance in the LIGHT division’s new electrification contracts. 

The company’s market in China showed a sharp drop, underperforming by 9 points amid a strategic portfolio shift.

“Given the worsening economic environment and the significant uncertainty surrounding automotive production volumes, we will publish new 2025 guidance adapted to these new market conditions when we publish our 2024 results,” said Christophe Périllat, chief executive at Valeo. 

Source: Investing.com