RBC Capital has adjusted its price target on Autoliv, Inc. (NYSE: ALV) downward to $141.00 from $146.00 but left its Outperform rating intact. The firm said the revision reflects Autoliv's 2026 outlook, which RBC described as "well below consensus expectations." The guidance included a projected 1% outgrowth rate for 2026 that notably disappointed the analyst team.
Despite the weaker guidance, RBC pointed to valuation metrics that suggest the stock may still be trading attractively. Autoliv's PEG ratio sits at 0.66, indicating the company's price-to-earnings ratio is low relative to expected near-term earnings growth. The stock's current P/E ratio is 13.24, and analysts are forecasting fiscal 2026 earnings per share of $10.59.
RBC attributed the subdued outgrowth forecast largely to production dynamics in the United States. The firm noted that Autoliv's content per vehicle in the U.S. is nearly double the average content per vehicle in China, a factor it views as weighing on the company's near-term growth outlook. Given that production mix can materially affect supplier revenue, this differential was cited as a central reason for lowering the price target.
At the same time, RBC highlighted a positive development for Autoliv: a major contract win with a Chinese automaker that is producing vehicles in Europe. The analyst firm said the deal validates Autoliv's "competitive moat" and suggested Western suppliers could be beneficiaries if Chinese vehicle exports to Europe continue to expand. RBC also flagged potential upside to global production if outstanding issues under the USMCA trade agreement are resolved in July - a contingency that could improve Autoliv's production outlook.
Autoliv reported fourth-quarter 2025 results that beat expectations on both the earnings and revenue lines. The company posted EPS of $3.19 for the quarter, above the forecasted $2.90. Revenue came in at $2.82 billion versus an anticipated $2.77 billion. Those results represent a positive earnings surprise for the quarter.
Nevertheless, the stock declined in pre-market trading following the results, reflecting investor concerns about the company's future trajectory rather than its immediate financial performance. RBC noted that analysts across other firms had not yet published widespread upgrades or downgrades in reaction to the earnings report, though the quarterly beat could influence subsequent assessments.
RBC's move to trim the price target while maintaining an Outperform rating underscores a balance in the firm's view: valuation and specific competitive wins support a constructive stance, but near-term production and geographic content disparities present tangible headwinds. The potential resolution of trade issues in July and the recent European contract are cited as key factors that could help reverse the softer growth outlook.
Conclusion
RBC's adjustment to Autoliv's price target reflects caution prompted by the company's 2026 guidance, particularly the modest 1% outgrowth projection and the company's higher U.S. content per vehicle compared with China. Offsetting those concerns are a favorable PEG ratio, a recent contract that underscores competitive strengths in Europe, and the possibility of improved global production if trade issues are resolved. Investors appear to be weighing those mixed signals, as evidenced by the stock's pre-market weakness despite a quarterly earnings beat.