Oppenheimer maintains Aptive stock Outperform with $83 target

On Wednesday, Oppenheimer analysts maintained their Outperform rating and $83.00 price target for Aptive PLC (NYSE:APTV). The decision comes as Aptive announced its plan to separate its Advanced Safety & User Experience and Engineered Components Group from its Electrical Distribution System (EDS) business. This strategic move is seen as part of Aptive's ongoing effort to isolate and grow its high-value sectors.

The firm anticipates that the remaining parts of Aptive will trade at a low-double digit EBITDA multiple, while EDS is expected to align with the valuation of comparable Tier 1 suppliers. This assessment supports a combined value that meets or exceeds the $83 price target set by Oppenheimer. Aptive management has scheduled a conference call for 8 a.m. ET to discuss the company's direction further. Following this call and management's comments, shares of Aptive are expected to experience an increase in trading activity. For investors seeking deeper insights, InvestingPro offers exclusive access to 8+ additional ProTips and a comprehensive Pro Research Report covering Aptiv's complete financial picture. For investors seeking deeper insights, InvestingPro offers exclusive access to 8+ additional ProTips and a comprehensive Pro Research Report covering Aptiv's complete financial picture.

The firm anticipates that the remaining parts of Aptive will trade at a low-double digit EBITDA multiple, while EDS is expected to align with the valuation of comparable Tier 1 suppliers. This assessment supports a combined value that meets or exceeds the $83 price target set by Oppenheimer.

Aptive management has scheduled a conference call for 8 a.m. ET to discuss the company's direction further. Following this call and management's comments, shares of Aptive are expected to experience an increase in trading activity.

In other recent news, Aptiv has announced a plan to divide its Electrical Distribution Systems business into two independent entities. This strategic move aims to enhance the focus of both Aptiv and the new standalone EDS business. After the separation, Aptiv anticipates robust financial performance with mid-to-high single-digit revenue growth. Meanwhile, the new EDS company plans to focus on next-generation electrical architecture solutions, targeting mid-single digit revenue growth.

Aptiv also reported that its shareholders have approved a significant corporate restructuring plan, including a merger and a scheme of arrangement. In financial developments, Aptiv has decided to fully redeem €700 million of its Euro-Denominated Senior Notes due in 2025. Analyst firms TD Cowen, Oppenheimer, and RBC Capital Markets have adjusted their price targets for Aptiv, citing challenges in the operating environment.

Despite a 6% drop in Q3 2024 revenue to $4.9 billion, Aptiv recorded an increase in earnings per share (EPS) to $1.83 and achieved record operating income. The company revised its full-year revenue outlook to between $19.6 billion and $19.9 billion, with an operating margin of 11.9%, and lowered its adjusted full-year EPS estimates to $6.15. These are among the recent developments at Aptiv.

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