Faurecia S.E.

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Faurecia S.E. (EO.PA) is a French multinational corporation that is one of the largest international automotive parts manufacturers in the world. It was founded in 1997 and is headquartered in Nanterre, France, but operates in well over 35 countries around the world and is a major player in the global secular shift to electric vehicles. Faurecia mainly works on the interior of vehicles, designing and manufacturing parts like seats, console panels, and dashboards, but also produces exhaust systems. In fact, Faurecia is the global leader in emissions control technology, which of course is why it is such an important part of the new energy vehicle movement for the future. Learn more

Faurecia’s stock trades on the Paris Euronext exchange and currently sits at approximately €43.00 per share with a market cap of €5.8 billion. As we saw with much of the manufacturing industries around the world, Faurecia’s stock and productivity was hit by the COVID-19 pandemic back in 2020, although the stock has recovered nicely since its lows. What does Faurecia look like as an investment moving forward? Here’s a hint: it certainly has strong tailwinds over the next decade as Europe focuses on its carbon neutral strategy, with all of the big automakers shifting to electric.

Faurecia Stock Analysis: Faurecia has an A+ lineup of customers already in its portfolio which includes some of the global leaders in the electric vehicle revolution. Being based in Europe certainly has its advantages, as the continent is home to some of the biggest automakers on the planet. Faurecia already has existing partnerships with Volkswagen, Volvo, Stellantis, Audi, Renault, BMW, Daimler, and Jaguar Land Rover. But an encouraging sign is that Faurecia is anticipating doubling its growth in the key markets of the U.S. and China by 2025. How will they do this? It has locked up partnerships with major Chinese automakers like BYD and Li Auto, as well as iconic American automakers like General Motors and Ford.

As of 2021, Faurecia is the top producer of door panels and instrument panels in the world, the third largest center console manufacturer, and the co-market leader in SAS interior modules or Steering And Suspension. Faurecia is getting more efficient in their manufacturing processes too, eliminating unnecessary tasks and reducing its total number of processes from 80 in 2019 to less than 50 in 2025, which is anticipated to lead to higher margins per factory which will increase average sales per plant from €90 million in 2019 to €120 million in 2025. These reductions will be accommodated by increased use of artificial intelligence and machine learning, as well as advanced robotics within the factories.

Faurecia is fully embracing sustainability by creating new auto parts from bio-sourced and recyclable materials, which contributes heavily to its carbon reduction. With three main growth drivers for the future including heavy concentration in cockpit electronics, display technologies, and advanced driver assistance systems, Faurecia is positioned to benefit from the incoming wave of technologically advanced and autonomous vehicles. With its emissions system management, Faurecia anticipates becoming the global leader in ultra-low emission vehicles, as well as in hydrogen storage systems for hydrogen powered vehicles. Faurecia’s target is €25 billion annual sales by 2025, which means it is trading at a very cheap forward looking price to sales of 0.20. Faurecia is trading at a very cheap valuation and could be a multibag investment moving forward!

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