BMO Capital Rated Delphi Automotive as ‘Outperform’

Delphi Automotive (DLPH) has a market cap of $18.3 billion. It fell 1.1% to close at $67.31 per share on December 28, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 0.04%, 1.5%, and -20.1%, respectively, on the same day.

DLPH is trading 0.45% below its 20-day moving average, 1.0% above its 50-day moving average, and 1.0% below its 200-day moving average.

The Vanguard Large-Cap ETF (VV) invests 0.09% of its holdings in Delphi Automotive. The YTD price movement of VV was 11.6% on December 28.

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

• Autoliv (ALV) — $9.9 billion
• Lear Corporation (LEA) — $9.3 billion
• Visteon (VC) — $2.7 billion

BMO Capital initiated its coverage of Delphi Automotive with an “outperform” rating and set the stock’s price target at $93.00 per share.

Delphi Automotive (DLPH) reported net sales of $4.1 billion in 3Q16, 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.

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

• revenues 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 GNC Holdings (GNC).