Berenberg Rated Delphi Automotive as a ‘Hold’

Delphi Automotive (DLPH) has a market cap of $18.1 billion. It fell 2.5% to close at $66.98 per share on November 22, 2016.

Gabriel Kane - Author

Nov. 24 2016, Updated 3:04 p.m. ET

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Price movement

Delphi Automotive (DLPH) has a market cap of $18.1 billion. It fell 2.5% to close at $66.98 per share on November 22, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.31%, 4.7%, and -20.5%, respectively, on the same day.

DLPH is trading 1.1% above its 20-day moving average, 0.59% below its 50-day moving average, and 1.1% below its 200-day moving average.

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Related ETF and peers

The Vanguard Large-Cap ETF (VV) invests 0.09% of its holdings in Delphi Automotive. The YTD price movement of VV was 9.8% on November 22.

The market caps of Delphi Automotive’s competitors are as follows:

  • Autoliv (ALV) — $9.0 billion
  • Lear Corporation (LEA) — $9.0 billion
  • Visteon Corporation (VC) — $2.7 billion

DLPH’s rating

On November 22, 2016, Berenberg initiated its coverage of Delphi Automotive with a “hold” rating and set the stock’s price target at $70.00 per share.

According to analyst Fei Teng, “Delphi is successfully repositioning itself into a high growth, high margin business through M&A and cost optimisation, and stands as one of the best quality businesses within its peer group. Its growth profile, margin resilience and best-in-class cash generation supports our constructive view of the company, but we also see downside risk to growth and pricing in its Powertrain division.

“On balance, we see Delphi as a high quality business with resilience to a volume downturn, but are wary of incremental political risk around emissions legislation and potential trade barriers with Mexico following the US election results.”

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Performance of Delphi Automotive in 3Q16

Delphi Automotive (DLPH) reported 3Q16 net sales of $4.1 billion, a rise of 13.9% compared to its net sales of $3.6 billion in 3Q15. Sales in its Electrical/Electronic Architecture, Powertrain Systems, and Electronics & Safety segments rose 17.8%, 1.2%, and 14.2%, respectively, in 3Q16 compared to 3Q15. The company’s operating margin narrowed 150 basis points in 3Q16 compared to 3Q15.

Its net income and EPS (earnings per share) fell to $293.0 million and $1.07, respectively, in 3Q16, compared to $404.0 million and $1.42, respectively, in 3Q15. It reported adjusted EPS of $1.50 in 3Q16, a rise of 17.2% compared to 3Q15.

Delphi’s cash and cash equivalents fell 26.2%, and its inventories rose 16.4% in 3Q16 compared to 4Q15. Its current ratio rose to 1.34x, and its debt-to-equity ratio fell to 3.1x in 3Q16, compared to its current ratio and debt-to-equity ratio of 1.30x and 3.4x, respectively, in 4Q15.

During 3Q16, the company repurchased 1.5 million shares worth ~$100 million.


Delphi Automotive (DLPH) has made the following projections for 2016:

  • revenue in the range of $16.4 billion–$16.5 billion
  • adjusted operating income in the range of $2.16 billion–$2.19 billion
  • adjusted EPS in the range of $6.00–$6.10
  • cash flow from operations of $1.9 billion
  • capital expenditure of $800 million
  • adjusted effective tax rate of 17%

Next, we’ll look at Greif (GEF).


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