BUZZ - Jefferies says Valeo is best able to cope with China's economic slowdown, downgrades Faurecia to "Hold"

September 23 - ** Jefferies stated that the valuation of the auto parts industry is "already at a low level," but warned that as exposure to high-margin markets continues to shrink, the slowdown in growth in the Chinese market will leave this sector with almost no room for recovery.

** The firm upgraded Valeo (VLOF.PA) from “Hold” to “Buy,” considering the company best positioned to withstand the current market environment. It pointed out that Valeo’s book-to-bill ratio for China orders is 5 times, while peers are typically only at 2 to 3 times.

** Jefferies added that Valeo's entry into the data center solutions field has recently boosted its stock price, but more customer signings will need to be seen before this factor is incorporated into its investment thesis.

** The broker downgraded Dana (DCH.N) from “Buy” to “Hold,” as it faces a "slowing growth momentum" after a strong H1, partly due to disruptions caused by the model changeover of GM's pickup trucks, high new model launch costs, and the realization of merger synergies likely proving more challenging than expected (link).

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