(BFM Stock Exchange) – The financial intermediary has degraded to sell its recommendation on the automotive supplier, estimating the expectations of consensus too high for the current semester, due to a slowdown in automotive production.

Like many automotive equipment manufacturers, Option has suffered in recent months on the stock market, the group being at the front line of concerns about the activity of car manufacturers. Over a year, the title still loses 16%.

However, Option has passed the event of annual publications without incident. Last month, the automotive equipment supplier unveiled results by progress for the past year, a feat in a disaster automotive market and marked by a series of warnings on resounding results.

A slowdown in automotive production

But UBS fears that this dynamic is dried up for the French group with a less toned automobile production in 2025.

The design office thus degraded its advice on OptiBobility, to pass it to “sell”, against “neutral” before. However, he brought his price target to 9.50 euros against 8.40 euros previously. A target which nevertheless supposes a drop in the action of 9% at the end of Tuesday.

On the Paris Stock Exchange, the Opthobility Cale action. The title cedes 4.6% around 3:10 p.m. on Wednesday and even accuses the second largest withdrawal of the SBF 120 index behind Ubisoft.

The Swiss Bank expects OPMobility to announce profits and a disappointing cash flow in the first half due to low production levels. It cites S&P data which anticipates a 3% drop in the production of light vehicles outside China compared to the previous year.

UBS recalls that the automotive equipment supplier aims for a more balanced performance for the 2025 exercise while the first half is historically more solid. This increases uncertainty for the second half, and therefore ultimately that the market is disappointed.

Upcoming challenges

The design office therefore estimates the overly optimistic alpha consensus. This consensus incorporates a favorable scenario with a profit per share for 2025-2026 up approximately 20% to 30%, when UBS is much more measured and expects an increase from 10% to 15% of this indicator.

“In the short term, it is unlikely that the production of world light vehicles will provide support, the volatility of manufacturers’ production calendars being likely to continue,” said the financial intermediary. As for the Lighting Division created by Opthobility in 2022 following several business buyouts, it should not reach the profitability threshold before 2026, according to its estimates.

However, the design office raises its profit forecast by action for the financial year 2025-2027 from around 15% to 30%. He lowers in parallel his forecast of free cash flow and anticipates higher investment expenses and outputs of recurring capital.

“We also think that it will be difficult to reduce investment spending significantly given the transformation of the product portfolio in the coming years,” said UBS. Thus, its free cash flow estimates are 20% at 30% in consensus for the period 2025-2027.

Only a potential economic recovery in Europe could stimulate the attraction of very volatile values ​​such as Opthobility. This would undermine the investment thesis for the sale of UBS.

A demanding valuation

UBS reports that Opti-Bobility on the stock market is negotiated at a level close to its historic average, with a course ratio on profits (PER) of approximately 8 to 9 times for the financial year 2025-2026 (against a consensus housed at 6 to 7 times), and a premium of around 15% compared to its comparables.

“The current course of action seems to take into account a turnover of +3 % in annual sliding an operating margin of approximately 4.5 % and a return on cash flow from 10 % to 15 %, which seems ambitious to us,” concludes the financial intermediary.