APTV
Aptiv PLC
Industrial/Transportation, TMT
12/22/2023
Presented
| Date | 12/18/2023 |
| Price | $87.30 |
| Market Cap | $24.69B |
| Ent Value | $33.38B |
| P/E Ratio | 10.92x |
| Book Value | $38.11 |
| Div Yield | 0% |
| Shares O/S | 282.86M |
| Ave Daily Vol | 2,443,744 |
| Short Int | N/A |
Current
| Price | $70.00 |
| Market Cap | $18.60B |
| Aptiv Plc is a technology and mobility architecture company, which engages in the business of designing and manufacturing vehicle components; providing electrical, electronic, and active safety technology solutions to the global automotive and commercial vehicle markets; and creating the software and hardware foundation for vehicle features and functionality. It operates under the Signal and Power Solutions; and Advanced Safety and User Experience segments. The Signal and Power Solutions segment focuses on the design, manufacture, and assembly of the vehicle's electrical architecture including engineered component products, connectors, wiring assemblies, harnesses, cable management, electrical centers, hybrid high voltage, and safety distribution systems. The Advanced Safety and User Experience segments is involved in critical technologies and services to enhance vehicle safety, security, comfort, and convenience including sensing and perception systems, electronic control units, multi-domain controllers, vehicle connectivity systems, cloud-native software platforms, application software, autonomous driving technologies, and end-to-end DevOps tools. The company was founded in 1994 and is headquartered in Dublin, Ireland. |
Publicly traded companies mentioned herein: Aptiv PLC (APTV), Ford Motor Co (F), General Motors Co (GM)
Highlights
The presenter is long shares of Aptiv PLC (APTV), a vehicle components manufacturer that was originally part of GM’s 1999 Delphi spin-off. Delphi filed for bankruptcy in 2005 and later spun off APTV in 2017 following a massive reinvention effort. The presenter describes APTV as the most technically sophisticated tier-1 automotive parts supplier based on strong technology, IP, and leadership. It is also differentiated in its portfolio’s alignment with industry megatrends “safe, green, and connected” as a major advanced driver assistance system (ADAS) provider of both the technological functionality and the hardware implementation for OEMs. However, the stock is cyclical due to the underlying automotive industry, and recent volatility has created a narrative that APTV’s growth over market will remain in the LSD% range in a weak SAAR environment. In contrast, he models 7% – 9% growth over market, SAAR growth, and the winding down of its money-losing JV Motional to reach ~$10 of 2025 EPS (vs. consensus $7.37). Underwriting a 15x valuation on his 2025 earnings implies 72% upside to $150 per share.
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