It’s been a mediocre week for Aptiv PLC (NYSE:APTV) shareholders, with the stock dropping 19% to US$56.37 in the week since its latest third-quarter results. Revenues US$4.9b disappointed slightly, at5.1% below what the analysts had predicted. Profits were a relative bright spot, with statutory per-share earnings of US$1.48 coming in 10% above what was anticipated. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. Readers will be glad to know we’ve aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Aptiv after the latest results.
View our latest analysis for Aptiv
After the latest results, the 20 analysts covering Aptiv are now predicting revenues of US$20.8b in 2025. If met, this would reflect a reasonable 5.5% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to tumble 39% to US$6.29 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$21.4b and earnings per share (EPS) of US$6.77 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.
The consensus price target fell 12% to US$81.20, with the weaker earnings outlook clearly leading valuation estimates. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Aptiv at US$115 per share, while the most bearish prices it at US$53.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Aptiv’s past performance and to peers in the same industry. It’s pretty clear that there is an expectation that Aptiv’s revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 4.4% growth on an annualised basis. This is compared to a historical growth rate of 9.7% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 9.3% annually. So it’s pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Aptiv.
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 negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. We have forecasts for Aptiv going out to 2026, and you can see them free on our platform here.
Even so, be aware that Aptiv is showing 2 warning signs in our investment analysis , and 1 of those shouldn’t be ignored…
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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.