US Auto Suppliers — Fresh Look: Prefer Visible Growth, FCF Inflection, and BS Strength; China/EU Cross-Currents and Non-Auto Key Swing Factors; BWA, DAN Top Picks; U/G ADNT, THRM; D/G APTV, LEA, MGA

In this deep-dive report, we are taking a fresh look at our US auto supplier coverage, rolling out our 6-12 month rank order and, relatedly, moving to Neutral on APTV, LEA and MGA while upgrading ADNT and THRM to Overweight. The setup for suppliers remains defined by limited industry volume growth, with US and European LV sales/production expected to remain broadly flattish through 2028 and China representing the largest swing factor as near-term demand payback, excess capacity and rising exports reshape regional mix and competitive dynamics. Against this backdrop, we believe supplier differentiation is increasingly less about headline production growth and more about the durability and quality of company-specific growth: exposure to US onshoring and conquest wins, participation in Chinese OEM export/localization platforms, ability to defend content against insourcing/local competition, and the extent to which growth comes from higher-value, higher-margin or less cyclical end markets.