Shareholders might have noticed that Aptiv PLC (NYSE:APTV) filed its annual result this time last week. The early response was not positive, with shares down 3.0% to US$83.50 in the past week. Revenues were US$20b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$10.39, an impressive 29% ahead of estimates. This is an important time for investors, as they can track a company’s performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We’ve gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
View our latest analysis for Aptiv
Following the latest results, Aptiv’s 20 analysts are now forecasting revenues of US$21.5b in 2024. This would be an okay 7.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to plummet 58% to US$4.31 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$21.7b and earnings per share (EPS) of US$4.69 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$109, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company’s valuation. There are some variant perceptions on Aptiv, with the most bullish analyst valuing it at US$155 and the most bearish at US$69.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Aptiv’shistorical trends, as the 7.2% annualised revenue growth to the end of 2024 is roughly in line with the 7.8% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 10% per year. So it’s pretty clear that Aptiv is expected to grow slower than similar companies in the same industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$109, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn’t be too quick to come to a conclusion on Aptiv. Long-term earnings power is much more important than next year’s profits. At Simply Wall St, we have a full range of analyst estimates for Aptiv going out to 2026, and you can see them free on our platform here..
Before you take the next step you should know about the 2 warning signs for Aptiv (1 makes us a bit uncomfortable!) that we have uncovered.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.