Autoliv Inc

U.S. stock futures pointed to sharp losses on Friday, with Netflix and Intuitive Surgical among the biggest premarket decliners. S&P 500 futures dropped 67 points, or 0.9%, Nasdaq 100 futures tumbled 490 points, or 1.7%, and Dow futures fell 331 points, or 0.6%, as investors continued to reassess technology valuations. Netflix slid 9.3% after reporting second-quarter revenue of $12.56 billion that narrowly missed estimates and issuing weaker-than-expected third-quarter guidance. Intuitive Surgical fell more than 12% after maintaining its full-year procedure growth outlook for its da Vinci robotic surgery platform and warning that changes to certain U.S. insurance plans could weigh on demand. Other notable movers included Regenxbio, which slumped 16.6% on a $100 million public offering, and Autoliv, down 5.8% after a restructuring charge of roughly $142 million tied to closing manufacturing operations in Türkiye.

Autoliv shares fell 5% premarket after the automotive safety supplier reported second-quarter adjusted earnings per share of $2.43, missing the analyst consensus of $2.46. Revenue reached $2.8 billion, exceeding the $2.77 billion estimate and marking a 3.3% increase from the prior-year quarter, with organic sales growth of 1.0% outpacing a 0.3% decline in global light vehicle production. Operating margin declined to 6.8% from 9.1%, though adjusted operating margin improved to 9.6% from 9.3%, supported by direct material cost savings. Sales to Chinese original equipment manufacturers grew more than 40%, and Chinese OEMs now account for 55% of sales in China, while sales in India grew more than 35%. The company maintained its fiscal 2026 guidance of around 0% organic sales growth and an adjusted operating margin of around 10.5% to 11%, with operating cash flow of around $1.2 billion.

StockStory identified Moog, Goldman Sachs, and Autoliv as profitable companies that warrant caution due to competitive and financial headwinds. Moog, with a 9.4% operating margin, saw its free cash flow margin shrink by 6.6 percentage points over five years and posted low returns on capital. Goldman Sachs, despite a 38.2% operating margin, recorded annual revenue growth of just 2.5% and EPS growth of 3.1% over five years, with tangible book value per share rising only 5.9% annually over two years. Autoliv, at a 9.7% operating margin, reported 1.8% annual revenue growth over two years, a 1.4% sales growth forecast, and a 17.9% gross margin reflecting high production costs.

StockStory highlights Johnson Controls and ATI as industrials stocks with durable advantages, while recommending investors avoid Autoliv. Johnson Controls, with a market cap of $87.86 billion, benefits from a 32.9% gross margin and share buybacks that boosted earnings per share growth. ATI, valued at $27.23 billion, posted 11.1% annual revenue growth over five years and expanded its free cash flow margin by 21.7 percentage points. Autoliv, a $9.67 billion passive safety systems maker, faces soft demand with estimated 1.5% revenue growth and a low 17.9% gross margin.

StockStory identifies two industrials stocks with exciting potential and one facing headwinds. Autoliv, trading at $121.96 per share, is flagged as a sell due to soft revenue growth of 1.8% over the last two years, estimated 1.5% growth for the next 12 months, and a below-peer gross margin of 17.9%. Keysight, at $349.76 per share, is highlighted for its best-in-class gross margin of 63.3%, strong free cash flow, and stellar returns on capital. Watts Water Technologies, at $339.32 per share, is a top pick with annual revenue growth of 10.7% over five years, earnings per share growth boosted by share buybacks, and a free cash flow margin that expanded by 6.1 percentage points over the same period.