Auto parts supplier Aptiv (APTV)
has already reclaimed about half the ground it lost during the March
panic selling, but there could still be some worthwhile upside for
shareholders to consider. Aptiv isn’t my favorite name (due largely to
valuation), but I can’t argue with the company’s strong leverage to
vehicle electrification and advanced safety, as well as its relative low
level of business at risk from the internal combustion engine (or ICE)
to hybrid/EV transition.
I’ve tweaked my model a
little, mostly in the direction of boosting long-term revenue potential
(content growth) and trimming back margin/FCF margin leverage (due to
the competitive nature of the markets). I still expect Aptiv to generate
around mid-single-digit sales growth over the next decade, though, with
low double-digit FCF growth, and that supports a high single-digit
long-term return now.
Read more here:
Even After A Post-Panic Rebound, Aptiv Can Offer Some Upside
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