ALV Should I Buy
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Autoliv Inc (ALV) is not a strong buy at the moment for a beginner investor with a long-term strategy and $50,000-$100,000 available. The stock has mixed signals, with declining financial performance, insider and hedge fund selling, and a lack of strong positive catalysts. While analysts maintain mostly positive ratings, the recent price target reductions and weak technical indicators suggest waiting for a better entry point.
The MACD is negative and expanding, indicating bearish momentum. RSI is neutral at 50.343, showing no clear signal. Moving averages are converging, suggesting indecision in the market. The stock is trading near its pivot level of 123.815, with resistance at 127.437 and support at 120.194. Overall, the technical indicators do not strongly support a buy.
Analysts have maintained Buy and Outperform ratings, with some highlighting potential margin expansion and benefits from global production recovery. Additionally, the company's win with a Chinese OEM in Europe is a positive sign for future growth.
Hedge funds and insiders are selling significantly, indicating a lack of confidence. The stock has a 60% chance of declining in the short term, with potential losses of up to -15.96% in the next day. Financial performance in Q4 2025 showed declining net income, EPS, and gross margin despite revenue growth. Analysts have lowered price targets, citing softer revenue guidance and cautious industry outlook.
In Q4 2025, revenue increased by 7.68% YoY to $2.82 billion. However, net income dropped by 7.00% YoY to $226 million, EPS fell by 2.92% YoY to $2.99, and gross margin declined by 3.56% YoY to 20.31%. This indicates pressure on profitability despite top-line growth.
Analysts have mixed views: Berenberg, TD Cowen, and RBC Capital maintain Buy or Outperform ratings but have lowered price targets. Barclays and Baird also reduced price targets, citing softer revenue guidance and cautious industry production outlook. The consensus suggests cautious optimism but acknowledges near-term challenges.
