Key Takeaways:
Schaeffler cut its 2028 sales target to €24 billion-€26 billion from €27 billion-€29 billion, sending shares down 18 percent.
The German machine and auto parts maker lowered its medium-term revenue expectations because of weaker market conditions for passenger cars and light commercial vehicles, the company said Friday. The revised range implies a midpoint of €25 billion, roughly 11 percent below the prior €28 billion midpoint.
Schaeffler confirmed its 2028 targets for an adjusted operating profit margin of 6 percent to 8 percent and adjusted free cash flow of €400 million-€600 million. The company, a supplier to BMW, Volkswagen, and Ford, left its profitability and cash flow guidance unchanged.
The stock fell 18 percent at 1025 GMT in Frankfurt trading, according to exchange data. The guidance cut reflects a deteriorating outlook for the European automotive supply chain, where slowing demand and rising competition from Chinese EV makers have pressured component manufacturers across the region.
At current exchange rates, the revised 2028 revenue range equates to $27.6 billion-$29.9 billion. The company's next quarterly report will show whether the weaker demand environment is also compressing margins in its bearings and automotive technology divisions.
The revised outlook places Schaeffler among European auto suppliers facing a prolonged demand downturn. The sector has been squeezed by the industry's transition to electric vehicles, which requires significant capital investment while traditional combustion-engine volumes decline. Schaeffler's automotive technologies division, which supplies drivetrain and chassis components, is directly exposed to the pace of EV adoption across its customer base.
The guidance cut could also weigh on sentiment for other European component makers, including Continental and ZF Friedrichshafen, which serve the same OEM customer base. Schaeffler's reduced revenue expectations suggest that order books across the supply chain are thinning as carmakers defer new model programs and trim production schedules.
The company's dual-segment structure — bearings and industrial solutions alongside automotive technologies — provides some diversification, but the automotive division accounts for the majority of group revenue. A sustained downturn in passenger car production would therefore have an outsized impact on Schaeffler's top line through 2028.
The guidance reduction indicates management expects the auto market downturn to persist through the end of the decade. Investors will watch Schaeffler's next results for updated segment-level margins and any further revisions to its capital allocation plans. The company's ability to hold its operating margin target of 6 percent to 8 percent while revenue declines will be a key test of cost discipline.
This article is for informational purposes only and does not constitute investment advice.
