Core Viewpoint - Aptiv PLC (APTV) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors often rely on earnings estimates to determine a stock's fair value, leading to buying or selling actions that affect stock prices [4]. Recent Performance and Projections - Aptiv is projected to earn $7.32 per share for the fiscal year ending December 2025, reflecting a year-over-year increase of 16.9% [8]. - Over the past three months, the Zacks Consensus Estimate for Aptiv has risen by 4.5%, indicating a positive trend in earnings estimates [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a 'Strong Buy' or 'Buy' rating [9][10]. - The upgrade of Aptiv to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Insights - Investors are comparing Aptiv PLC (APTV) and Modine (MOD) to determine which stock offers better value for investment [1] - APTV has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while MOD has a Zacks Rank of 3 (Hold) [3][7] Valuation Metrics - APTV has a forward P/E ratio of 8.73, significantly lower than MOD's forward P/E of 23.92 [5] - APTV's PEG ratio is 0.58, compared to MOD's PEG ratio of 0.70, suggesting APTV may be undervalued relative to its expected earnings growth [5] - APTV's P/B ratio stands at 1.67, while MOD's P/B ratio is much higher at 5.65, indicating APTV's market value is more favorable compared to its book value [6] Value Grades - APTV holds a Value grade of A, while MOD has a Value grade of C, reflecting APTV's stronger valuation metrics [6]

Group 1 - Strattec Security (STRT) is currently outperforming its peers in the Auto-Tires-Trucks sector, with a year-to-date performance increase of 4.3%, while the sector has seen an average decline of 18.9% [4] - The company holds a Zacks Rank of 1 (Strong Buy), indicating strong analyst sentiment and a positive earnings outlook, with a 33% increase in the consensus estimate for full-year earnings over the past quarter [3] - Strattec Security is part of the Automotive - Original Equipment industry, which has an average decline of 3.3% this year, further highlighting STRT's relative strength within this group [5] Group 2 - The Auto-Tires-Trucks group includes 100 companies and is currently ranked 13 in the Zacks Sector Rank, which measures the strength of sector groups based on the average Zacks Rank of individual stocks [2] - Another company in the same sector, Aptiv PLC (APTV), has also shown strong performance with a year-to-date increase of 5.7% and a Zacks Rank of 2 (Buy) [4][5] - Investors in the Auto-Tires-Trucks sector are encouraged to monitor both Strattec Security and Aptiv PLC for their continued solid performance [6]

Company Overview - Aptiv PLC is a leading global technology and mobility company primarily serving the automotive sector, focusing on designing and manufacturing vehicle components and providing electrical, electronic, and safety technology solutions [11] - The company delivers end-to-end smart mobility solutions, active safety, and autonomous driving technologies, enhancing user experience and connected services [11] Investment Potential - Aptiv has a Zacks Rank of 3 (Hold) and a VGM Score of A, indicating a solid position in the market [12] - The company is considered a top pick for growth investors, with a Growth Style Score of B, forecasting a year-over-year earnings growth of 14.9% for the current fiscal year [12] - In the last 60 days, seven analysts have revised their earnings estimates upwards for fiscal 2025, with the Zacks Consensus Estimate increasing by $0.18 to $7.19 per share [12] - Aptiv boasts an average earnings surprise of 9.9%, further enhancing its attractiveness to investors [12] Summary of Style Scores - The VGM Score combines various investing styles, making it a comprehensive indicator alongside the Zacks Rank, which is based on earnings estimate revisions [6][7] - Stocks with a Zacks Rank of 1 or 2 and Style Scores of A or B are recommended for higher likelihood of success [9][10]

Group 1 - Aptiv (NYSE: APTV) revised its growth and earnings lower in the third quarter, leading to an 18% decline in share prices from $69.07 to $56.83 [1] - Although share prices have partially recovered, the market remains challenging and growth prospects are uncertain [1] - The analysis utilizes Cash Flow Returns On Investment based DCF valuation tools from ROCGA Research, which has over 20 years of experience in investment analysis [1] Group 2 - ROCGA Research aims to identify undervalued and quality companies through an objective and systematic framework for valuation [1]

分组1 - Zacks Premium offers various tools for investors, including daily updates, access to the Zacks Rank List, and Equity Research reports to enhance investment confidence [1][2] - The Zacks Style Scores rate stocks based on value, growth, and momentum characteristics, providing complementary indicators to the Zacks Rank [2][3] 分组2 - The Value Score identifies undervalued stocks using financial ratios like P/E and Price/Sales, helping value investors find attractive opportunities [3] - The Growth Score focuses on a company's financial health and future outlook, analyzing earnings and sales projections to identify sustainable growth stocks [4] - The Momentum Score helps investors capitalize on price trends by analyzing recent price changes and earnings estimate revisions [5] 分组3 - The VGM Score combines the three Style Scores to identify stocks with the best value, growth, and momentum characteristics, serving as a strong indicator alongside the Zacks Rank [6] - The Zacks Rank model, based on earnings estimate revisions, has shown a strong historical performance, with 1 (Strong Buy) stocks averaging a +25.41% annual return since 1988 [8] 分组4 - Aptiv PLC is a leading technology and mobility company in the automotive sector, providing vehicle components and smart mobility solutions [12] - Aptiv has a Zacks Rank of 3 (Hold) and a VGM Score of A, with a Momentum Style Score of B, indicating potential for upward movement [13][14] - Recent earnings estimates for Aptiv have been revised higher, with a Zacks Consensus Estimate of $7.03 per share for fiscal 2025 and an average earnings surprise of 9.9% [13]

Currency and Financial Instruments - The foreign currency translation adjustment loss for the year ended December 31, 2024, was $282 million, primarily due to a strengthening U.S. dollar against the Mexican Peso (18%), Euro (6%), and Chinese Yuan Renminbi (1%) [405] - As of December 31, 2024, the net fair value liability of all financial instruments with exposure to currency risk was approximately $925 million, compared to $507 million in 2023 [407] - The potential change in fair value from a hypothetical 10% adverse change in quoted currency exchange rates would result in a loss of approximately $21 million as of December 31, 2024 [407] - The Company has designated Euro-denominated Senior Notes as net investment hedges to manage foreign currency exposure [406] - The effective portion of gains or losses on net investment hedges is recognized within the cumulative translation adjustment component in the consolidated statements of comprehensive income [406] Commodity and Interest Rate Exposure - The net fair value of commodity swaps related to non-ferrous metals was a liability of $6 million as of December 31, 2024, compared to $2 million in 2023 [408] - If commodity prices changed by 10%, the fair value of commodity swaps would decrease or increase by $41 million and $43 million as of December 31, 2024 and 2023, respectively [408] - The Company had approximately $250 million of floating rate debt related to the Term Loan A Credit Agreement as of December 31, 2024 [409] - A 25 basis point increase in interest rates would increase annual interest expense by $1 million related to the Term Loan A Credit Agreement [413] Financial Performance - For the year ended December 31, 2024, Aptiv reported net sales of $19,713 million, a decrease of 1.7% from $20,051 million in 2023 [443] - Operating income for 2024 was $1,842 million, an increase of 18.1% compared to $1,559 million in 2023 [443] - Net income attributable to Aptiv for 2024 was $1,787 million, down 39% from $2,909 million in 2023 [443] - Basic net income per share attributable to ordinary shareholders decreased to $6.97 in 2024 from $10.50 in 2023, reflecting a decline of 33.3% [443] - Other comprehensive loss for 2024 was $536 million, compared to a gain of $147 million in 2023 [446] Assets and Liabilities - Total assets decreased from $24,427 million in 2023 to $23,458 million in 2024, a decline of approximately 4% [449] - Total current liabilities rose from $4,808 million in 2023 to $5,131 million in 2024, an increase of about 7% [449] - Long-term debt increased significantly from $6,204 million in 2023 to $7,843 million in 2024, a rise of approximately 26% [449] - Total shareholders' equity decreased from $11,745 million in 2023 to $8,993 million in 2024, a decline of about 23% [449] Cash Flow and Expenditures - Cash flows from operating activities increased to $2,446 million in 2024, compared to $1,896 million in 2023, an increase of approximately 29% [451] - Capital expenditures for 2024 were $830 million, down from $906 million in 2023, a decrease of approximately 8% [451] - The company reported a net cash used in investing activities of $507 million in 2024, compared to $1,002 million in 2023 [451] Shareholder Activities - The company repurchased ordinary shares totaling $4,104 million in 2024, compared to $398 million in 2023 [454] - The number of ordinary shares outstanding decreased from 99 million in 2023 to 92 million in 2024, a reduction of approximately 7% [456] - Dividend payments to minority shareholders were $23 million in 2024, compared to $18 million in 2023, indicating a slight increase [456] Goodwill and Impairment - The company's goodwill related to the Wind River reporting unit was $2,279 million as of December 31, 2024 [429] - The Company performs an annual goodwill impairment assessment in the fourth quarter, with no impairments recorded in 2024, 2023, or 2022 [502] - Goodwill for the Wind River reporting unit is valued at $2,279 million, with its fair value exceeding carrying value by less than 1% [502] Restructuring and Costs - Aptiv recorded restructuring charges totaling approximately $193 million in 2024, a decrease from $211 million in 2023, with $140 million attributed to the Signal and Power Solutions segment [566] - The company expects to incur additional restructuring costs of approximately $55 million in the next twelve months, primarily related to the Signal and Power Solutions segment [563] - Cash expenditures related to restructuring programs were approximately $238 million in 2024, compared to $128 million in 2023 [565] Debt and Financing Activities - The Company fully repaid $301 million on the Tranche A Term Loan on October 27, 2023, recognizing a loss on debt extinguishment of approximately $1 million [577] - Aptiv entered into a $2.5 billion senior unsecured bridge facility on August 1, 2024, which was fully drawn and subsequently repaid in Q3 2024, incurring a loss on debt extinguishment of approximately $11 million [578] - The Term Loan A Credit Agreement, entered on August 19, 2024, has an aggregate principal amount of $600 million, with issuance costs of approximately $2 million [579] - The Company redeemed €700 million of 1.50% Euro-denominated senior unsecured notes in December 2024, financed by the issuance of €750 million in 4.25% Euro-denominated senior unsecured notes due 2036 [586] Investments and Affiliates - Aptiv's investments in publicly traded equity securities totaled $11 million as of December 31, 2024, compared to $14 million in 2023 [469] - The company received dividends of $12 million from equity method investments in 2024, up from $5 million in both 2023 and 2022 [468] - The investment in TTTech Auto was written down to an estimated fair value of $147 million in 2024, resulting in a non-cash impairment charge of approximately $36 million [538] Research and Development - Total research and development expenses were approximately $1,097 million, $1,289 million, and $1,120 million for the years ended December 31, 2024, 2023, and 2022, respectively [479] Compliance and Controls - Aptiv maintained effective internal control over financial reporting as of December 31, 2024, based on COSO criteria [435] - As of December 31, 2024, the Company maintained a consolidated leverage ratio of not more than 3.5 to 1.0, in compliance with the Credit Agreement covenants [575]

Financial Performance - Aptiv PLC reported quarterly revenue of $4.91 billion, exceeding estimates of $4.89 billion [1] - Adjusted earnings were $1.75 per share, surpassing estimates of $1.65 per share [1] - For the first quarter, Aptiv expects revenue between $4.64 billion and $4.84 billion, compared to estimates of $4.81 billion [2] - The company anticipates first-quarter adjusted earnings of $1.40 to $1.60 per share, against estimates of $1.49 per share [2] - Full-year revenue is expected to be between $19.6 billion and $20.4 billion, compared to estimates of $19.96 billion [3] - Full-year adjusted earnings are projected at $7 to $7.60 per share, exceeding estimates of $6.92 per share [3] Market Outlook - Aptiv's CEO emphasized the company's focus on enabling customers to transition to a software-defined future [1] - The company is executing the separation of its Electrical Distribution Systems business, aiming to create two independent companies to better address customer needs and market opportunities [2] Analyst Ratings - Wells Fargo analyst raised Aptiv's price target from $76 to $86 while maintaining an Overweight rating [6] - UBS analyst increased the price target from $82 to $91, maintaining a Buy rating [6] - Oppenheimer analyst raised the price target from $83 to $85, keeping an Outperform rating [6] - RBC Capital analyst boosted the price target from $75 to $82 while maintaining an Outperform rating [6]

Core Insights - Aptiv PLC reported mixed fourth-quarter 2024 results, with adjusted earnings per share of $1.75 beating the Zacks Consensus Estimate by 5.4% and increasing 25% year over year, while revenues of $4.9 billion missed the estimate and decreased slightly year over year [1] Financial Performance - Adjusted revenues declined 1% year over year, with a notable 8% decline in Europe, flat performance in South America, and a 3% growth in both North America and Asia, including a 4% growth in China [2] - Signal and Power Solutions' revenues were $3.5 billion, down 1% year over year, while the Advanced Safety and User Experience segment saw a 2% increase to $1.4 billion [3] - Adjusted operating income was $623 million, up 3.8% year over year, with an adjusted operating income margin of 12.2%, reflecting a 50 basis points increase [3] Cash Flow and Debt - At the end of the quarter, the company had cash and cash equivalents of $1.6 billion, up from $1.1 billion in the previous quarter, while long-term debt decreased to $7.8 billion from $8.3 billion [4] - Total available liquidity was $3.6 billion, down from $3.9 billion in the prior quarter, with $1.1 billion generated from operating activities [4] Future Outlook - For Q1 2025, Aptiv expects revenues between $4.635 billion and $4.835 billion, and adjusted EPS between $1.4 and $1.6, both lower than current Zacks Consensus Estimates [5] - For the full year 2025, revenues are expected to be between $19.6 billion and $20.4 billion, with adjusted EPS between $7 and $7.6, both higher than current Zacks Consensus Estimates [6] - The company anticipates an adjusted operating income margin between 11.9% and 12.3%, and capital expenditure of $880 million [6]

Financial Data and Key Metrics Changes - Aptiv reported fourth quarter revenue of $4.9 billion, a decrease of 1% year-over-year, primarily due to production schedule weaknesses at select OEMs in Europe and China [7][28] - Operating income for the quarter was $623 million, reflecting strong operational performance and cost reduction initiatives, leading to a 25% increase in earnings per share [7][29] - Operating cash flow reached a record $1.1 billion, enabling accelerated deleveraging [8][29] Business Line Data and Key Metrics Changes - Advanced Safety and User Experience (ASUX) segment revenues increased by 2%, driven by double-digit growth in North America, while user experience revenues declined due to the roll-off of legacy programs [15][32] - Signal and Power Solutions segment revenues declined by 3%, impacted by lower vehicle production schedules, although non-auto markets showed growth [19][34] - New business bookings reached a record of $31 billion, with significant contributions from both ASUX and Signal and Power Solutions segments [10][12] Market Data and Key Metrics Changes - Revenue from local Chinese OEMs grew by 16%, reflecting strong commercial traction in the transition to software-defined vehicles [10][31] - North America saw a 3% revenue increase, while Europe experienced an 8% decline due to slower growth in electrified vehicle platforms [30][36] - China revenue mix for 2024 was 53% from local OEMs, indicating a shift towards domestic players [31] Company Strategy and Development Direction - The company is focused on separating the electrical distribution systems business to create two independent entities, enhancing strategic and operational focus [20][21] - Aptiv aims to capitalize on megatrends such as electrification, automation, and connectivity, positioning itself to address evolving customer needs [23][25] - The company plans to optimize its cost structure and pursue strategic capital deployment opportunities, including debt paydown and potential M&A [25][39] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the impact of geopolitical factors and trade policies on supply chains and vehicle production [23][36] - The outlook for 2025 includes a conservative estimate for North American vehicle production, with expectations of a 3% decline in global vehicle production [36][39] - Management remains confident in the growth of electric vehicles and advanced ADAS solutions, despite the uncertain environment [24][39] Other Important Information - The company achieved significant technology milestones in 2024, including awards for advanced safety systems and software solutions [8][10] - Aptiv's investment in Wind River's commercial and product organization is expected to drive revenue growth in 2025 [17][18] Q&A Session Summary Question: Regarding the conservative outlook for North America - Management acknowledged the need for a conservative approach due to geopolitical dynamics and high inventory levels, particularly in North America [51][52] Question: Changes in customer mix in China - Management noted a significant increase in share with local Chinese OEMs, expecting to reach market parity by early 2026 [56][57] Question: Additional areas of conservatism in the outlook - Management highlighted a more conservative outlook for EV growth in Europe, with expectations of lower revenue growth compared to market forecasts [61][62] Question: Coordination with OEMs regarding tariffs - Management confirmed good coordination with OEMs to address potential tariff impacts and supply chain challenges [68][69] Question: Expectations for EDS post-spin-off - Management expects stable revenue for EDS in 2025, with growth driven by EV adoption and market share gains [106][108]