Aptiv (APTV) AI Stock Analysis

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Aptiv

(NYSE:APTV)

Rating:81Outperform

Price Target:

$70.00

▲( 4.54% Upside)

Aptiv's strong financial performance and positive technical indicators are significant strengths, driving a favorable stock score. Despite some revenue challenges and macro uncertainties, the company's strategic focus on innovation and growth, particularly in China, supports its robust position in the market. Valuation considerations and the absence of dividends slightly temper the overall score.

Positive Factors

Financial Performance

Management stressed the strong cash flow generation, which should enable a faster deleverage of the balance sheet than most expect.

Growth Prospects

Aptiv is positioned to high growth and high margin end-markets, focusing on next-gen ADAS solutions and connection & protection solutions.

Strategic Initiatives

The tax-free spin of its EDC business could benefit shareholders in the long run.

Negative Factors

Growth Challenges

Global OEM challenges have slowed the pace of adoption of EV and autonomous driving applications, impacting APTV's foundational growth areas.

Market Performance

APTV shares have underperformed the broader markets since peaking in early 2022, down 62% versus up 27% for the S&P 500.

Supply Chain Risks

Tariffs on major clients VW and Stellantis pose significant supply chain risks for APTV, with revenue impact anticipated.

Aptiv (APTV) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$14.69B

Dividend YieldN/A

Average Volume (3M)2.92M

Price to Earnings (P/E)11.1

Beta (1Y)0.86

Revenue Growth-2.47%

EPS Growth-43.12%

CountryUS

Employees141,000

SectorConsumer Cyclical

Sector Strength74

IndustryAuto - Parts

Share Statistics

EPS (TTM)1.69

Shares Outstanding217,730,480

10 Day Avg. Volume2,410,102

30 Day Avg. Volume2,917,888

Financial Highlights & Ratios

PEG Ratio-0.75

Price to Book (P/B)1.59

Price to Sales (P/S)0.00

P/FCF Ratio7.88

Enterprise Value/Market Cap1.41

Enterprise Value/Revenue0.26

Enterprise Value/Gross Profit5.67

Enterprise Value/Ebitda1.78

Forecast

1Y Price Target

$73.09

Price Target Upside9.15% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering12

Aptiv Business Overview & Revenue Model

Company DescriptionAptiv PLC designs, manufacturers, and sells vehicle components worldwide. The company provides electrical, electronic, and safety technology solutions to the automotive and commercial vehicle markets. It operates in two segment, Signal and Power Solutions, and Advanced Safety and User Experience. The Signal and Power Solutions segment designs, manufactures, and assembles vehicle's electrical architecture, including engineered component products, connectors, wiring assemblies and harnesses, cable management products, electrical centers, and hybrid high voltage and safety distribution systems. The Advanced Safety and User Experience segment provides critical components, systems integration, and software development for vehicle safety, security, comfort, and convenience, such as sensing and perception systems, electronic control units, multi-domain controllers, vehicle connectivity systems, application software, and autonomous driving technologies. The company was formerly known as Delphi Automotive PLC and changed its name to Aptiv PLC in December 2017. Aptiv PLC was founded in 2011 and is based in Dublin, Ireland.

How the Company Makes MoneyAptiv makes money primarily through the design, manufacture, and sale of its automotive technology products and solutions. The Signal and Power Solutions segment generates revenue from the sale of electrical architectures, components, and systems that manage power and data distribution throughout vehicles. The Advanced Safety and User Experience segment earns income through the development and sale of advanced driver assistance systems, user interfaces, and connectivity solutions that improve vehicle safety and enhance the driving experience. Aptiv's revenue is bolstered by strong partnerships with leading global automakers and continued investment in research and development to stay at the forefront of automotive technology innovation.

Aptiv Financial Statement Overview

Summary

Aptiv shows strong profitability with an impressive net profit margin and effective cost management. While there's a slight dip in revenue, the company maintains a balanced leverage position with robust ROE and healthy cash flow generation.

Income Statement

Very Positive

Aptiv's income statement shows solid profitability with a strong gross profit margin and consistent EBIT and EBITDA margins over the TTM (Trailing-Twelve-Months). The net profit margin is impressive, indicating efficient cost management and a healthy bottom line. However, slight revenue decline from the previous annual report suggests a need for focus on revenue growth strategies.

Balance Sheet

Positive

The balance sheet reflects a moderate debt-to-equity ratio, suggesting a balanced approach to leveraging. Return on equity is robust, indicating effective utilization of shareholder funds to generate profits. However, the equity ratio shows a moderate level of reliance on liabilities, which should be managed to prevent potential risks.

Cash Flow

Positive

Cash flow analysis highlights a healthy operating cash flow to net income ratio, underscoring strong cash generation capability. Free cash flow growth is positive, supported by effective capital expenditure management. However, there's a need to monitor financing and investing cash flows to sustain long-term liquidity.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
19.64B	19.71B	20.05B	17.49B	15.62B	13.07B
	Gross Profit
3.65B	3.71B	3.46B	2.63B	2.44B	1.94B
	EBIT
1.89B	1.84B	1.56B	1.26B	1.19B	2.12B
	EBITDA
2.93B	1.84B	2.53B	1.97B	1.83B	2.88B
	Net Income Common Stockholders
1.56B	1.79B	2.94B	869.00M	809.00M	1.80B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.10B	1.57B	1.64B	1.53B	3.14B	2.82B
	Total Assets
23.10B	23.46B	24.43B	21.90B	18.01B	17.52B
	Total Debt
8.31B	8.89B	6.79B	6.85B	4.37B	4.40B
	Net Debt
7.21B	7.32B	5.15B	5.32B	1.23B	1.58B
	Total Liabilities
13.85B	14.37B	12.58B	12.79B	9.45B	9.42B
	Stockholders Equity
8.96B	8.80B	11.55B	8.83B	8.35B	7.91B
Cash Flow		Free Cash Flow
1.71B	1.62B	990.00M	419.00M	611.00M	829.00M
	Operating Cash Flow
2.48B	2.45B	1.90B	1.26B	1.22B	1.41B
	Investing Cash Flow
-405.00M	-507.00M	-1.00B	-5.17B	-729.00M	-626.00M
	Financing Cash Flow
-1.89B	-1.97B	-807.00M	2.35B	-191.00M	1.61B

Aptiv Technical Analysis

Technical Analysis Sentiment

Positive

Last Price66.96

Price Trends

50DMA

59.21

Positive

100DMA

61.26

Positive

200DMA

62.96

Positive

Market Momentum

MACD

3.11

Negative

RSI

66.10

Neutral

STOCH

75.17

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APTV, the sentiment is Positive. The current price of 66.96 is above the 20-day moving average (MA) of 62.01, above the 50-day MA of 59.21, and above the 200-day MA of 62.96, indicating a bullish trend. The MACD of 3.11 indicates Negative momentum. The RSI at 66.10 is Neutral, neither overbought nor oversold. The STOCH value of 75.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for APTV.

Aptiv Risk Analysis

Aptiv disclosed 37 risk factors in its most recent earnings report. Aptiv reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 2 New Risks

We are pursuing a plan to separate our Electrical Distributions Systems business into an independent, publicly traded company. The proposed separation is contingent upon the satisfaction of a number of conditions, may not be completed on the currently contemplated timeline, or at all, and may not achieve the intended benefits. Q4, 2024

We may be subject to various Swiss taxes as a result of the reorganization transaction. Q4, 2024

Aptiv Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
VC	81 Outperform	$2.31B	7.85	25.15%	―	-1.35%	-39.06%
APTV	81 Outperform	$14.69B	11.09	15.52%	―	-2.47%	-43.12%
BWA	76 Outperform	$7.32B	26.78	5.38%	1.32%	-8.22%	-52.61%
LEA	75 Outperform	$5.02B	11.01	10.00%	3.28%	-3.15%	-6.70%
ALV	73 Outperform	$7.88B	11.75	28.71%	2.71%	-2.29%	35.00%
Sector *	62 Neutral	$6.97B	11.36	2.77%	3.91%	2.66%	-22.00%
MBLY	61 Neutral	$13.03B	―	-22.18%	―	-0.38%	-1681.25%

* Consumer Cyclical Sector Average

Performance Comparison

APTV

Aptiv

66.96

-13.32

-16.59%

ALV

Autoliv

100.54

-20.42

-16.88%

BWA

BorgWarner

32.71

-1.91

-5.52%

LEA

Lear

90.54

-29.79

-24.76%

Visteon

83.85

-24.95

-22.93%

MBLY

Mobileye Global, Inc. Class A

15.78

-11.78

-42.74%

Aptiv Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: 17.35%|

Next Earnings Date:Jul 31, 2025

Earnings Call Sentiment Neutral

Aptiv's Q1 2025 earnings call highlighted strong financial performance with record operating income and EPS growth, driven by strategic cost-saving measures and robust bookings, particularly in China. However, the company faces challenges from declining revenues in specific segments due to lower vehicle production and macroeconomic uncertainties related to global trade policies. The sentiment remains cautious, as the company awaits greater visibility into customer demand in the second half of the year.

Q1-2025 Updates

Positive Updates

First Quarter Revenue

Aptiv reported Q1 2025 revenue of $4.8 billion, down 1% due to lower vehicle production in North America and Europe but was buoyed by strong growth in non-automotive end markets.

Operating Income and EPS Growth

Operating income reached a first-quarter record of $572 million, an increase of over 5%. Earnings per share also reached a first-quarter record of $1.69, reflecting a 46% increase from the prior year.

Strong Cash Flow

Operating cash flow totaled $273 million, attributed to robust execution across all segments and ongoing cost-saving initiatives.

Successful Share Repurchase Program

Aptiv completed a $3 billion accelerated share repurchase program, reducing the share count by 18%, with a total of 20% of shares retired over the last 12 months.

Bookings Success

First quarter bookings nearly reached $5 billion, with significant traction in China amounting to $1.4 billion and new business awards across each segment with local Chinese OEMs.

Innovation and Industry Recognition

Aptiv's Active Safety revenues increased 9%, and its innovative radar-based AI/ML Behavior Planner won the Automotive News PACE Pilot Innovation Award.

Negative Updates

Revenue Decline in Key Regions

Revenues declined 3% in the Electrical Distribution Systems segment, primarily due to lower light vehicle production and negative customer mix in China.

Macro Uncertainty and Tariff Impacts

Uncertainty due to rapid changes in global trade policies, particularly affecting the automotive market, poses challenges in predicting demand for the second half of the year.

Challenges with Specific EV Customer

In China, revenues were impacted by significant production volume declines with a specific global EV manufacturer.

Company Guidance

During the Aptiv Q1 2025 earnings call, the company delivered strong financial results, with revenue totaling $4.8 billion, slightly down 1% due to lower vehicle production in North America and Europe and a negative customer mix. Operating income reached a record $572 million, reflecting a 5% increase, while earnings per share hit a record $1.69. Operating cash flow was $273 million, aiding Aptiv in accelerating its deleveraging plan. The company completed a $3 billion accelerated share repurchase program, reducing its share count by 18%. Despite market uncertainties, particularly from global trade policies and tariffs, Aptiv remains confident in its long-term growth strategy, focusing on electrification, software-defined solutions, and connectivity, with continued strong bookings of nearly $5 billion in Q1, including significant traction in China.

Aptiv Corporate Events

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures

Aptiv Plans Spin-Off of Electrical Distribution Unit

Positive

Feb 6, 2025

Aptiv announced its intention to spin off its Electrical Distribution Systems business into a new independent company by the end of the first quarter of 2025, resulting in a realignment into three reporting segments. The company reported strong financial results for the fourth quarter and full year of 2024, including record operating cash flow and earnings, amid a challenging market environment. This strategic move aims to enhance Aptiv’s ability to capitalize on market opportunities and drive long-term growth.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.