Adient - bonds vs. shares vs. macro

All,

Please find a slightly updated analysis of Adient here.

Good liquidity, since bond issue last year, but NCF to remain flat to negative in 2020.

Few positive catalysts in sight other than the slow return to profitability over the next two-three years. 

Downside could come from macro events and a further cooling of the automotive sector (some evidence of that in Europe). 

Bonds have gained some 10 points in the year-end rally.

Overall since the bond issue bonds have recovered, while the shares have not. 

We think of it as a macro short, but bonds at YTMs of 5-7% are still a little wide for that. So we are certainly open to other ideas.

Wolfgang

Bonds

Shares