Sunday, December 8, 2019

Delphi Technologies Dinged By Near-Term Challenges

There has been quite a bit of variation in the fortunes of leading powertrain suppliers this year, as Valeo (OTCPK:VLEEY) and BorgWarner (BWA), two companies I’ve written favorably about, have performed noticeably better than Delphi Technologies (DLPH). While I believe some of this can be tied to inflated past optimism about Delphi’s merits as a fuel efficiency and EV play, the reality is that Delphi’s recent performance has been lackluster, with worsening trends relative to the improvements at BorgWarner and Valeo.

A lot of sell-side ink has been spilled on which company (or companies) have the best components for hybrids and electric vehicles, but the reality will be that no one company dominates the market, or at least not for long. To that end, I believe Delphi is likely to be a long-term winner in the market, and I believe the current share price reflects a great deal of the near-term risk to weaker vehicle production rates and slower hybrid/EV migrations, but not much upside from that eventual migration.

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Delphi Technologies Dinged By Near-Term Challenges

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