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Barclays Rates Delphi Automotive Stock as ‘Overweight’

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Delphi Automotive’s price movement

Delphi Automotive (DLPH) has a market cap of $21.0 billion. It fell by 5.6% to close at $75.04 per share on January 7, 2016, from the current market conditions. Delphi Automotive’s price movement on a weekly, monthly, and YTD (year-to-date) basis is -13.3%, -13.3%, and -12.5%, respectively.

Technically, the stock has broken support and is trading below all moving averages. Currently, Delphi Automotive is trading 11.2% below its 20-day moving average, 11.1% below its 50-day moving average, and 8.0% below its 200-day moving average.

First Trust International IPO ETF (FPX) invests 2.1% of its holdings in Delphi Automotive. The ETF tracks a market cap–weighted index of the 100 largest US IPOs (initial public offerings) over the first 1,000 trading days of each stock. Stocks must pass additional quantitative screening to make it into the index. The YTD price movement of FPX is -3.7% as of January 6, 2016.

Delphi Automotive’s competitors and their market caps are as follows:

  • Autoliv (ALV) – $9.8 billion
  • Lear Corporation (LEA) – $8.2 billion
  • Visteon Corporation (VC) – $4.4 billion

Barclays’ ratings for Delphi Automotive

Barclays has given Delphi Automotive an “overweight” rating and a price target of $105. On January 4, 2016, Goldman Sachs added it to its Conviction Buy List and gave it a price target of $114.

Delphi Automotive’s performance in fiscal 3Q15

Delphi Automotive (DLPH) reported fiscal 3Q15 net sales of $3.6 billion, a fall of 3.5% from the net sales of $3.8 billion in fiscal 3Q14. Its adjusted net income and adjusted EPS (earnings per share) rose to $365.0 million and $1.28, respectively, in fiscal 3Q15, compared with an adjusted net income and adjusted EPS of $340.0 million and $1.13, respectively, in fiscal 3Q14.

Meanwhile, its inventories and accounts receivable rose by 17.2% and 9.0%, respectively, between fiscal 3Q15 and fiscal 4Q14. Its debt-to-equity ratio rose to 2.9 in fiscal 3Q15 from a debt-to-equity ratio of 2.6 in fiscal 4Q14.

On December 18, 2015, the company acquired HellermannTyton, a manufacturer of high-performance cable management solutions. This acquisition is valued at 1.1 billion British pounds on a cash and debt-free basis.

The PE (price-to-earnings) and PBV (price-to-book value) ratios of Delphi Automotive are 16.4x and 9.2x, respectively, as of January 7, 2016.

Projections

The company has made the following projections for fiscal 2015:

  • revenue in the range of $14.9 to $15.1 billion
  • adjusted operating income in the range of $1.94 to $1.97 billion
  • adjusted EPS in the range of $5.15 to $5.25
  • cash flow before financing of $1.1 billion

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