Sector: Consumer Discretionary | Focus: Automotive Parts & Equipment
HQ: Auburn Hills, Michigan
Financial Risks
The company faces risks from cyclical automotive and truck production, commodity price fluctuations, inflation impacting input costs, competitive pressures, rapidly changing EV technology, uncertain EV demand, geopolitical conflicts, acquisition integration challenges, potential liabilities from acquisitions, dependence on OEM customers, strikes, interest rate and currency fluctuations, information system disruptions, legal proceedings, and the uncertain global economic environment. Environmental liabilities at 17 Superfund sites are also a concern. The company's ability to collect VAT refunds from PHINIA is uncertain. Hurricane damage to a North Carolina facility is a potential short-term risk.
Financial Upside
The company anticipates growth in eProducts, driven by the shift to EVs and stricter emissions standards. The company's new business unit structure and acquisitions (Eldor, Hubei, Drivetek, Rhombus, Santroll) are intended to enhance its electrification portfolio and power electronics capabilities. The company expects net new business-related sales growth to outperform market production declines, leading to flat to modestly declining net sales in 2024 (excluding currency impacts). Improved full-year earnings are projected, driven by the technology-focused portfolio and cost controls.
