BofA ups Valeo to 'buy' on expected earnings inflection
** BofA Securities upgrades French car parts supplier Valeo VLOF.PA to "buy" from "neutral", turning more positive in anticipation of good financial performance
** Shares in Valeo jump about 5.4%, sitting among top performers on pan-European STOXX 600 .STOXX and France's SBF 120 .SBF120 indices
** BofA expects Valeo's financial performance to start aligning with recent commercial successes, adding that earnings quality has inflected
** "We highlight recent success (in 2022-23) in securing new business wins and see strong growth prospects in ADAS, Lighting and ePowertrain," says BofA
** The brokerage sees profitability and earnings improving on peaking R&D expenditure, declining use of accounting adjustments, more favourable commercial terms of new contracts coming into play from 2025, and unwinding negative effects of the semi-conductor shortage
** BofA also forecasts robust margin expansion for 2025-26 (+160 basis points) and FCF yield rising above 20%
** Stock is on track for its best day in about 1-1/2 month, if gains hold
Reporting by Michal Aleksandrowicz
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