Global Research ab 15 March 2026 Road & Spak Everything In The Right Place? As we had documented in this weekly space, we grew more cautious particularly on suppliers as the group had rallied through 4Q25 earnings season. Our thinking was that most of the gains had been driven by multiple expansion, multiples looked stretched, and we saw a low probability that positive earnings revisions could backfill multiples. This meant that continued outperformance had to be driven by further multiple expansion – histo ...

Core Viewpoint - Phinia (PHIN) has experienced significant selling pressure, resulting in a 16.6% decline over the past four weeks, but analysts anticipate improved earnings in the near future [1] Group 1: Technical Analysis - The Relative Strength Index (RSI) is utilized to determine if a stock is oversold, with a reading below 30 indicating oversold conditions [2] - PHIN's current RSI reading is 29.75, suggesting that the heavy selling may be nearing exhaustion, indicating a potential rebound [5] - The RSI helps identify price reversal points, allowing investors to seek entry opportunities when a stock is undervalued due to excessive selling [3] Group 2: Fundamental Indicators - Analysts have raised earnings estimates for PHIN by 0.2% over the last 30 days, indicating a consensus among sell-side analysts that could lead to price appreciation [7] - PHIN holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks, which supports the potential for a near-term turnaround [8]

Summary of PHINIA 2026 Investor Day Company Overview - **Company Name**: PHINIA (NYSE:PHIN) - **Sales**: Approximately $3.5 billion in 2025 sales [7] - **Employee Count**: 12,000 employees globally [7] - **Core Business**: Diversified industrial company focusing on combustion technology and alternative fuels [9][10] Strategic Vision and Market Positioning - **Long-term Value Creation**: PHINIA aims to create long-term value through product leadership, stable growth, and financial discipline [12][20] - **Market Growth Expectations**: Anticipates sales growth to $4.2 billion by 2030, assuming no mergers or acquisitions [17] - **Financial Discipline**: Focus on cash flow generation, with an internal hurdle rate of 15% and expected cash conversion of over 40% [18] Industry Dynamics - **Combustion Technology**: Expected to remain a core technology in transportation, with advancements in efficiency and integration with hybrid technologies [9][10] - **Alternative Fuels**: Commitment to support the transition to lower carbon and zero carbon fuels, including ethanol, methanol, natural gas, and hydrogen [10] - **Market Trends**: Increasing vehicle age and miles driven per vehicle are driving growth in the independent aftermarket, which is expected to represent 68% of PHINIA's addressable market by 2035 [42] Product Leadership - **Innovation Focus**: PHINIA emphasizes product leadership through innovative solutions, supported by a global team of engineers and a strong intellectual property portfolio with over 350 patents [23][25] - **R&D Investment**: Approximately 6% of sales is allocated to R&D, with 89% of the budget focused on efficiency improvements [28] - **Precision Manufacturing**: Utilizes advanced manufacturing processes, including laser drilling and diamond-like coatings, to ensure high-quality products [29][32] Market Segmentation - **Addressable Markets**: PHINIA operates in five key segments, with service being the largest, representing over 60% of the total addressable market in 2024 [42] - **Light Passenger Vehicles**: Market share for internal combustion engines (ICE) and hybrids is expected to increase, with GDI penetration rates driving growth [66] - **Light Commercial Vehicles**: Electrification trends are impacting this market, but alternative fuels remain relevant [70] Financial Performance and Shareholder Returns - **Share Repurchases**: Over 9.8 million shares repurchased, representing nearly 21% of total shares outstanding, with a focus on maximizing shareholder returns [19] - **Dividend Commitments**: Commitment to delivering on dividend obligations while allocating capital for growth [18] Conclusion - **Future Outlook**: PHINIA is positioned for stable growth and profitability, with a strong focus on innovation, market expansion, and financial discipline [61] - **Commitment to Shareholders**: The company emphasizes the importance of shareholder returns and maintaining a strong market position through strategic initiatives and operational excellence [20][21]

PHINIA INVESTOR DAY 2026 WEDNESDAY, FEBRUARY 25, 2026 NEW YORK STOCK EXCHANGE 1 FORWARD-LOOKING STATEMENTS 2026 INVESTOR DAY Kellen Ferris VP Investor Relations 2 This presentation contains forward-looking statements within the meaning of U.S. federal securities laws. Forward-looking statements are statements other than historical fact that provide current expectations or forecasts of future events based on certain assumptions and are not guarantees of future performance. Forward-looking statements use word ...

Core Viewpoint - Momentum investing focuses on "buying high and selling higher," contrasting with traditional strategies of "buying low and selling high" [1] Group 1: Momentum Investing Characteristics - Momentum investing can be risky as stocks may lose momentum when their valuations exceed future growth potential, leading to potential losses for investors [2] - A safer approach may involve investing in bargain stocks that are experiencing recent price momentum, utilizing tools like the Zacks Momentum Style Score to identify such opportunities [3] Group 2: Phinia (PHIN) Stock Analysis - Phinia (PHIN) has shown a price increase of 8.1% over the past four weeks, indicating growing investor interest [4] - Over the past 12 weeks, PHIN's stock has gained 40.2%, demonstrating its ability to deliver positive returns over a longer timeframe [5] - PHIN has a beta of 1.37, suggesting it moves 37% more than the market in either direction, indicating fast-paced momentum [5] - The stock has a Momentum Score of B, suggesting it is a favorable time to invest in PHIN [6] - PHIN has a Zacks Rank 2 (Buy) due to upward revisions in earnings estimates, which typically attract more investor interest [7] - The stock is trading at a Price-to-Sales ratio of 0.83, indicating it is reasonably valued at 83 cents for each dollar of sales, providing room for growth [7] Group 3: Additional Investment Opportunities - Besides PHIN, there are other stocks that meet the criteria of the 'Fast-Paced Momentum at a Bargain' screen, suggesting further investment opportunities [8] - Investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [9]

Core Viewpoint - Phinia (PHIN) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, suggesting that upward revisions can lead to higher stock valuations [4][6]. - Institutional investors play a role in this relationship, as they adjust their valuations based on earnings estimates, leading to significant stock transactions that affect prices [4]. Company Performance and Outlook - The recent upgrade for Phinia reflects an improvement in its underlying business, with rising earnings estimates suggesting a favorable trend that could drive the stock price higher [5][10]. - Phinia is projected to earn $5.94 per share for the fiscal year ending December 2026, with a 12.7% increase in the Zacks Consensus Estimate over the past three months [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimate revisions, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - Phinia's upgrade places it in the top 5% of Zacks-covered stocks, indicating strong potential for market-beating returns in the near term [10].

Core Insights - PHINIA reported a strong fourth-quarter performance with net sales of $889 million, reflecting a 6.7% increase year-over-year, driven by growth in both Fuel Systems and Aftermarket segments for the third consecutive quarter [3][4][7] Financial Performance - Fuel Systems sales reached $560 million, up 7.9%, with an adjusted operating margin of 10.7% [2] - Aftermarket sales were $329 million, up 4.8%, with an adjusted operating margin of 15.8% [2] - Adjusted EBITDA for the quarter was $116 million, a $6 million increase from the previous year, with a margin of 13% [2][9] - Full-year revenue was approximately $3.5 billion, up 3%, with adjusted EBITDA of $478 million, remaining flat year-over-year [11][7] Growth Drivers - The company experienced favorable foreign exchange impacts of approximately $25 million and tariff recoveries of about $15 million, contributing to revenue growth [10][6] - Excluding these factors, revenue growth was modest at 2.3% for Q4 and 1.1% for the full year [6][11] Capital Allocation - PHINIA aggressively returned capital to shareholders, repurchasing 9.8 million shares (about 21% of the original count) and returning over $500 million through buybacks and dividends [5][18] - The company announced an 11% increase in dividends and a $150 million increase in the share repurchase program [18] 2026 Outlook - For 2026, PHINIA guided net sales between $3.5 billion and $3.7 billion, with adjusted EBITDA expected to be between $485 million and $525 million [20] - The company anticipates industry volumes to be flat to slightly down, but aims to offset this through market share gains in Aftermarket and growth in Off-Highway and Industrial segments [19][20]

Corporate Structure and Acquisitions - The Company completed the Spin-Off from BorgWarner on July 3, 2023, distributing PHINIA common stock to BorgWarner shareholders on a pro rata basis [18]. - On August 1, 2025, the Company acquired 100% of Swedish Electromagnet Invest AB for $47 million, enhancing its Fuel Systems segment with advanced alternative fuel technologies [19]. Financial Performance - Total net sales for the Company in 2025 were $3,483 million, representing a 2.35% increase compared to $3,403 million in 2024 [22]. - In 2025, net sales for the Fuel Systems segment were $2,320 million, an increase of 1.98% from $2,275 million in 2024, while Aftermarket segment sales reached $1,306 million, up 1.87% from $1,282 million in 2024 [22]. - The Company's unconsolidated joint venture sales amounted to approximately $256 million in 2025, up from $224 million in 2024 [23]. - Approximately 37% of the Company's net sales in 2025 were generated in the United States, while 63% were from international markets [29]. - For the year ended December 31, 2025, 35% of net sales were attributed to Service (OES and IAM), 25% to light passenger vehicle applications, and 19% to light commercial vehicle applications [30]. - The Company’s top five customers accounted for 37% of total sales in 2025, with General Motors representing 18% of net sales [32]. Research and Development - Gross R&D costs for 2025 were $190 million, with net R&D costs at $105 million, representing 3.0% of net sales [38]. - The Company held over 2,750 active pending applications and issued patents worldwide, indicating a strong commitment to intellectual property [39]. - The Fuel Systems segment includes advanced fuel injection systems and associated software aimed at reducing emissions and improving fuel economy [24]. Risk Management and Compliance - The Company faces risks related to economic conditions, competitive pressures, and supply chain disruptions that could impact its performance [10]. - The company employs various strategies to mitigate supply shortages and inflation, including near shoring and dual sourcing, and plans to continue these measures into 2026 [61]. - Commodity prices have been volatile, with the company experiencing price increases for energy, gases, and base metals since 2024, leading to higher operational costs [62]. - New trade regulations and tariffs are expected to impact input costs and supply availability, necessitating flexibility in supply chain management [63]. - The company is committed to compliance with extensive regulations across various domains, including environmental and data security laws [64]. - The company engages in proactive risk management during product development to ensure compliance with regulatory standards [65]. Stakeholder Engagement and Transparency - The Company emphasizes collaboration with stakeholders, including government agencies, to engage in public policy processes affecting its business [66]. - The company provides access to its financial reports, including the Annual Report on Form 10-K, through its investor relations website [67]. - The Company plans to announce future developments and financial performance through its websites and press releases [68]. - Future announcements regarding company developments will be made through its official websites and press releases [68]. Workforce and Leadership - As of December 31, 2025, the workforce comprised 12,500 employees, with 5,500 in the Americas, 1,700 in Asia, and 5,300 in Europe [46]. - The company prioritizes employee health and safety, maintaining ISO certifications at manufacturing facilities, with a focus on continuous improvement in safety performance [57]. - The executive team includes experienced leaders with backgrounds in various sectors, enhancing the company's strategic direction and operational efficiency [69].

分组1 - Phinia reported quarterly earnings of $1.18 per share, missing the Zacks Consensus Estimate of $1.35 per share, but showing an increase from $0.71 per share a year ago, resulting in an earnings surprise of -12.59% [1] - The company posted revenues of $889 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 5.13% and increasing from $833 million year-over-year [2] - Phinia has surpassed consensus EPS estimates two out of the last four quarters and topped consensus revenue estimates three times in the same period [2] 分组2 - The stock has gained approximately 24% since the beginning of the year, significantly outperforming the S&P 500's gain of 1.4% [3] - The current consensus EPS estimate for the upcoming quarter is $1.08 on revenues of $790.2 million, while for the current fiscal year, the estimate is $5.93 on revenues of $3.51 billion [7] - The Automotive - Original Equipment industry, to which Phinia belongs, is currently ranked in the bottom 42% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Data and Key Metrics Changes - Total net sales for Q4 2025 were $889 million, representing a year-over-year increase of 6.7% [5][15] - Adjusted EBITDA for the quarter was $116 million, up $6 million, with a margin of 13% [6][16] - Adjusted earnings per diluted share increased to $1.18 from $0.71 in the same period last year [7] - Full year revenue was approximately $3.5 billion, a 3% increase, excluding final contract manufacturing sales from the former parent [17][18] Business Line Data and Key Metrics Changes - Fuel system segment sales for Q4 were $560 million, up 7.9%, with an adjusted operating margin of 10.7% [6][19] - Aftermarket segment sales were $329 million, up 4.8%, with an adjusted operating margin of 15.8% [7][20] - For the full year, fuel systems revenue increased by 3.3%, while aftermarket segment sales rose by 2.7% [19][20] Market Data and Key Metrics Changes - Sales in Asia and the Americas showed strength, while Europe experienced lower sales within fuel systems [14][15] - The company noted that the aftermarket segment remained resilient, supported by an aging global vehicle fleet [9] Company Strategy and Development Direction - The company aims to differentiate through product leadership and focus on sustainable growth markets [12][24] - Capital allocation remains disciplined, with a focus on M&A opportunities while returning capital to shareholders [10][11] - The company plans to continue expanding its presence in core and adjacent markets, including aerospace and defense [8][12] Management's Comments on Operating Environment and Future Outlook - Management highlighted the resilience of the business amid a complex operating landscape and expressed confidence in long-term growth [3][25] - The outlook for 2026 anticipates flat to slightly down global industry volumes, with expectations of mid-single-digit sales growth [24][25] Other Important Information - The company reduced its debt by $24 million, resulting in a net leverage ratio decrease from 1.4x to 1.3x [7][21] - An 11% increase in dividends and a $150 million increase in the share repurchase program were announced [11][21] Q&A Session Summary Question: Clarification on commercial vehicle growth expectations in Europe - Management confirmed that the mid to upper single digits growth expectation refers to the overall industry [27][29] Question: Inquiry about Adjusted EBITDA margins and growth hurdles - Management explained that while revenue growth is expected, factors like FX and tariffs are impacting margin expansion [30][31] Question: Details on the third aerospace and defense supply contract - Management confirmed that the third contract is with the same customer as the previous two [32] Question: Volume assumptions for 2026 and potential for positive light vehicle volumes - Management indicated that the market is expected to be flat to down, but the company anticipates market share gains [82][84] Question: Capital allocation priorities and M&A outlook - Management stated that capital allocation decisions will focus on maximizing shareholder value, with share repurchases remaining a priority [59][60]