Autoliv Inc. Hits 20-Day Low Amid Dividend Adjustments
Shares of Autoliv Inc. (ALV.N) declined sharply today, hitting a 20-day low as investors reacted to upcoming ex-dividend dates. The stock's recent performance reflects a bearish trend, with the price breaking below this critical support level, signaling increased selling pressure. Analysts suggest that the anticipated price adjustments following the ex-dividend date, where shares are expected to open lower by approximately 0.74%, have contributed to the downward momentum. Additionally, the estimated annualized dividend yield of 2.97% may not be sufficient to offset investor concerns, leading to a cautious outlook for the stock in the near term.
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- Share Reduction Transaction: Tweedy, Browne Co disclosed in an SEC filing that it sold 31,740 shares of Autoliv during Q4, with an estimated transaction value of $3.79 million, reflecting a strategic response to market fluctuations.
- Stake Proportion Change: Following this sale, Tweedy, Browne's stake in Autoliv decreased to 400,924 shares, representing 3.84% of its $1.24 billion reportable U.S. equity AUM, indicating a cautious outlook on the company's future performance.
- Market Performance Analysis: As of February 2, Autoliv shares were priced at $120.49, up 32% over the past year, outperforming the S&P 500 by 12.78 percentage points, highlighting the company's strong position in the safety systems sector.
- Financial Health Status: Autoliv's recent quarterly report showed revenue of $2.82 billion, a 7.7% year-over-year increase, with operating cash flow hitting a record $544 million, supporting the company's dividend and buyback plans, although management anticipates flat organic growth in 2026.
- Strong Performance: Autoliv reported adjusted earnings per share of $3.19 for Q4, surpassing analyst expectations of $2.90, indicating robust market performance driven primarily by growth in India and Chinese OEMs.
- Sales Growth: The company achieved quarterly sales of $2.817 billion, exceeding the Street's estimate of $2.772 billion, with total sales for fiscal 2025 reaching $10.82 billion, showcasing its competitive strength in the global market.
- Cost Recovery: In Q4, Autoliv nearly recovered all tariff costs, achieving over 80% recovery for the full year, which supports profitability despite ongoing supply chain volatility impacting production efficiency.
- Future Outlook: While the company anticipates flat organic sales growth in fiscal 2026, projecting revenue of approximately $10.8 billion, below Wall Street's estimate, the CEO remains optimistic about future market performance, expecting improvements in 2026.
- Significant Sales Growth: In Q4 2025, Autoliv reported net sales of approximately $2.8 billion, an 8% year-over-year increase, with nearly 40% sales growth from Chinese OEMs, indicating strong performance in rapidly expanding markets and likely reinforcing its market position.
- Cash Flow and Shareholder Returns: The company achieved operating cash flow of $544 million in Q4, a 30% increase from last year, while repurchasing $150 million in shares and paying a dividend of $0.87 per share, reflecting robust cash flow management and commitment to shareholders.
- New Product Strategy: Autoliv's collaboration with Tensor on the first foldable steering wheel is targeted for volume production by late 2026, which could open new market opportunities and enhance future sales growth potential through innovation.
- Cautious Future Outlook: Management anticipates flat organic sales for 2026, with growth in China, India, and South America offsetting declines in North America and Europe, while setting an adjusted operating margin target of 10.5% to 11%, demonstrating a cautiously optimistic view of the market ahead.
- Record Gross Profit: Autoliv (ALV) achieved its highest quarterly gross profit driven by robust sales in India and new product launches, with Q4 sales reaching $2.82 billion, exceeding expectations by $50 million, demonstrating resilience amid challenges.
- Operational Challenges: Despite reporting adjusted earnings of $3.19 per share, beating expectations by $0.31, the company faces negative impacts on production efficiency and profitability due to low customer demand visibility and high call-off volatility, with 2026 expected to remain above pre-pandemic levels.
- Future Outlook: Autoliv anticipates organic sales to remain unchanged in 2026, with an adjusted operating margin forecasted between 10.5% and 11.0%, while navigating geopolitical risks and potential tariff changes that could impact operations.
- Cash Flow and Capex: The company expects operating cash flow of approximately $1.2 billion in 2026, with capital expenditures as a net percentage of sales projected to be below 5%, indicating ongoing efforts to control costs and optimize resource allocation.
- Earnings Beat: Autoliv reported adjusted Q4 EPS of $3.19, surpassing the analyst consensus of $2.90, with quarterly sales reaching $2.817 billion, exceeding the expected $2.772 billion, indicating strong performance driven by new product launches.
- Margin and Operating Pressure: Despite a 3.9% year-over-year increase in gross profit to $572 million, operating income fell by 9.6% to $319 million, with operating margin contracting from 13.5% to 11.3%, reflecting ongoing supply chain volatility and inflationary pressures impacting profitability.
- Cost Recovery and Layoffs: The company recovered nearly 100% of tariff costs in Q4 and over 80% for the full year, while reducing headcount by about 900 (1.4%), highlighting challenges in managing cost pressures and market fluctuations.
- Cautious Future Outlook: Autoliv guided for flat organic sales growth in 2026, projecting revenue of approximately $10.8 billion, below Wall Street's estimate of $11.18 billion, with an adjusted operating margin forecast of 10.5% to 11.0%, reflecting a cautious stance amid market uncertainties.
Profit Margin Expectations: AutoLiv's CEO anticipates a weaker profit margin for Q1 year-on-year due to various economic factors.
Contributing Factors: The decline in profit margin is attributed to lower levels of vehicle production, reduced engineering income, and the impact of last year's one-off gains related to Russia.










