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Ireland-based Aptiv PLC (APTV) engages in the design, manufacture, and sale of vehicle components. It provides electronic, and safety technology solutions to the automotive and commercial vehicle markets. With a market cap of $12.7 billion, Aptiv operates through the Signal and Power Solutions, and Advanced Safety and User Experience segments.
Aptiv has underperformed the broader market over the past year by a huge margin. APTV stock prices have plummeted 38% on a YTD basis and 26.5% over the past 52-week period compared to the S&P 500 Index’s ($SPX) 25.2% gains on a YTD basis and 36.4% returns over the past year.
Narrowing the focus, Aptiv has also lagged behind the First Trust Nasdaq Transportation ETF’s (FTXR) 17.3% gains on a YTD basis and 35.4% returns over the past year.
Shares of Aptiv plummeted 17.7% after the release of its disappointing Q3 earnings on Oct. 31. The company reported a 5.1% year-over-year decline in net sales to $4.9 billion, missing Wall Street’s estimates by 6.1%. Moreover, Aptiv reduced its full-year topline guidance, which unsettled investors’ confidence. The American auto industry has been facing several challenges, including intense competition from Chinese firms and a decline in demand due to inflation and economic uncertainty. Moreover, the increase in inventory build-up on automakers’ balance sheets has hurt component manufacturers’ product demand, leading to a decline in revenues.
Despite the headwinds, Aptiv showcased robust resilience and improvement in profitability. The company did a commendable job at maintaining efficiency, which led to a 22.3% annual growth in adjusted non-GAAP net income of $449 million.
For the current fiscal year, ending in December, analysts expect Aptiv’s adjusted EPS to rise 27.2% year-over-year to $6.18. Moreover, the company has a robust earnings surprise history. It has surpassed Wall Street’s earnings estimates in each of the past four quarters. Its adjusted EPS of $1.83 for the last reported quarter exceeded analysts’ projections by 8.3%.
APTV stock has a consensus “Moderate Buy” rating overall. Among the 21 analysts covering the stock, 14 advise “Strong Buy,” two suggest “Moderate Buy,” three recommend “Hold,” and two advocate a “Strong Sell” rating.
This configuration is slightly less bullish than two months ago when 13 analysts recommended a “Strong Buy,” one suggested a “Moderate Sell,” and one advised a “Strong Sell” rating.
On Nov. 4, Barclays PLC (BCS) analyst Dan Levy maintained a “Buy” rating while reducing the price target to $80.
APTV’s mean price target of $80.14 represents a premium of 44% to current price levels. Meanwhile, the street-high target of $113 suggests a massive potential upside of 103.1%.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
