Valeo Shares Drop Nearly 5%, Among the Largest Declines in the SBF 120
The automotive supplier records one of the sharpest declines in the SBF 120 in early afternoon trading. The movement comes the day after an industrial announcement with Dacia and following several sessions of gains. The stock is losing ground amid profit-taking, while the Paris index slightly retreats.
The Stock Breaks Below Its 20-Day Moving Average at €14.09 After a Nearly 30% Rally in Three Months
Valeo's stock falls by 4.67% to €13.47, among the steepest drops in the SBF 120 while the index itself only sheds 0.2%. This movement erases part of the recent rebound: the stock limits its gain to 6.9% over a month but remains up by 29.2% over three months. In terms of benchmarks, the price has fallen below its 20-day moving average of €14.09, a negative gap of 4.4%. Technical supports remain distant: the 50-day moving average at €12.45 and the 200-day at €11.65 provide a comfortable cushion, with the price still 8.2% above the former and 15.6% above the latter. The RSI at 54 remains neutral, indicating more of a breather than a characterized reversal. The session is part of a general pullback in the auto sector, as Brent crude loses another 4.3% to $79.62 a barrel following the U.S.-Iran agreement announced at the G7 in Évian.
High Short Interest on the Capital and an Industrial Launch with Dacia in the Background
The decline occurs the day after the commercial launch of the 48V two-speed electric axle chosen by Dacia for its Duster, Bigster, and Striker hybrids, co-developed with Renault Group. The market seems primarily to be digesting profit-taking after a bullish series that had pushed the stock close to the resistance level of €16.64. Regarding positioning, selling pressure remains high: according to reviewed declarations, six funds accumulate a net short position of 8.68% of the capital. However, this movement reflects a significant decrease over thirty days, with a drop of 7 points from the peak of 15.71% observed a month earlier. This still unusually high level of short interest reflects residual skepticism from institutional investors, which is reducing as the stock regains ground. In terms of valuation, the stock is trading at approximately 8.3 times the earnings expected for the current fiscal year according to the consensus of surveyed analysts. Regarding debt, Valeo launched at the end of May a bond issue of €600 million maturing in February 2033, intended to refinance part of its 2027 tranche. The technical threshold to watch remains the 20-day moving average at €14.09, crossing which would signal a resumption of the upward momentum.
