Jefferies assumes coverage on Forvia stock with Buy rating

Jefferies has assumed coverage on automotive supplier Forvia SE with a Buy rating and a price target of EUR10.70, a significant reduction from the previous EUR24.00, despite the stock's substantial underperformance in 2024 and 2025. The firm anticipates a reversal of this trend, citing catalysts such as strategic disposals, a refreshed company strategy under a new CEO, and a return to outperformance in China, highlighting the strength of its Electronics and Seating divisions and its relationship with BYD.

Analysis

Jefferies has initiated coverage on automotive supplier Forvia SE with a Buy rating, yet has concurrently set a price target of EUR10.70, a significant reduction from the previous EUR24.00. This action signals a valuation reset following a period of substantial share price underperformance in 2024 and 2025, which the firm attributes to a "meaningful derating." The bullish thesis is predicated on several future catalysts, including strategic disposals, a refreshed corporate strategy under a new CEO who is unattached to legacy businesses, and a projected return to outperformance in the crucial Chinese market. Supporting this outlook are Forvia's strong business segments, particularly Electronics, which accounted for 40% of order intake in Q1 2025, and its consistently strong Seating division. The company's established position in China, including a key relationship with BYD, is highlighted as a foundational element for the anticipated recovery.

Key Decisions for Investors

• Investors with a higher risk tolerance may consider the new Buy rating and reduced price target as a potential entry point for a turnaround story, contingent on the new management's execution.
• It is critical to monitor the specific catalysts cited by Jefferies, namely the progress of strategic asset disposals and tangible evidence of a performance recovery in China, as these are the primary drivers of the investment thesis.
• The drastic price target cut from EUR24.00 to EUR10.70 implies significant underlying risks and a substantial reassessment of value, warranting caution and careful position sizing until the company's refreshed strategy yields measurable improvements.