Analysts believe the automotive supplier adopted a relatively cautious tone regarding Q1 sales performance, which is expected to be impacted by lower industry volumes, unfavorable currency headwinds, and a challenging customer mix in China.

However, the first three months of fiscal 2026 unfolded in line with corporate expectations, Berenberg explains, and remain consistent with full-year targets for the time being. As a reminder, the group is targeting annual revenue between 20 and 21 billion euros at constant exchange rates, an operating margin between 6% and 6.5% of sales, and net cash flow greater than or equal to 3% of revenue. In 2025, revenue stood at 21.3 billion euros, with an operating margin of 6% and free cash flow at 3.9%. In short, nearly all 2026 targets are below 2025 levels.

Berenberg is leaving its estimates unchanged but has lowered its valuation multiples to account for the recent sector-wide downturn following the ongoing conflict in the Middle East. The price target is revised to 13 euros from 15 euros, while the Buy rating is maintained. Analysts note that while direct impacts from the war have been limited to date, inflation-driven price hikes are inherently margin-dilutive and typically occur with a time lag. Widespread inflationary pressures could also eventually weigh on costs and production volumes starting in the second quarter should the conflict persist.

Returning to the first quarter, Berenberg expects organic growth to slightly outperform global light vehicle production (-4% year-on-year). Unfavorable currency effects are estimated at 250 million euros for the first three months of the year. Total revenue is projected to reach 5.079 billion euros in Q1 2026, compared to 6.702 billion euros in 2025, representing a 24.22% decline.