We came across a bullish thesis on Aptiv PLC on Value Don’t Lie’s Substack. In this article, we will summarize the bulls’ thesis on APTV. Aptiv PLC’s share was trading at $77.81 as of January 28th. APTV’s trailing and forward P/E were 58.95 and 8.98 respectively according to Yahoo Finance.
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Aptiv PLC engages in design, manufacture, and sale of vehicle components for the automotive and commercial vehicle markets in North America, Europe, the Middle East, Africa, the Asia Pacific, South America, and internationally. APTV is completing the next phase of its transformation by spinning off its lower-margin, ICE-exposed wire harness business, Cyprium, leaving RemainCo as a higher-margin, growth-focused entity. Since 2017, Aptiv has grown revenue from $12.9bn to $20bn and EPS from $4.64 to $7.70, offering a GARP opportunity at a value price.
RemainCo, or “New Aptiv,” will comprise two core segments: safety and infotainment products—including radars, cameras, ADAS software, and cockpit controls—generating $5.8bn in revenue at ~15% EBITDA margins, and engineered components, producing connectors and cable management solutions with significant non-automotive exposure and ~22% EBITDA margins. Combined, RemainCo expects $12.4bn revenue in 2025, $2.3bn EBITDA (19% margin), $5.50 EPS, and $1bn free cash flow, with non-automotive revenue accounting for 24% of the total.
The spin-off creates a compelling investment case driven by multiple re-rating and multi-year organic growth. Management targets 4-7% revenue growth, 200bps of margin expansion, and mid-teens EPS growth to $8 by 2028, alongside $4bn cumulative free cash flow that could fund share buybacks. Under reasonable assumptions—12-13x earnings multiple and $6-6.50 EPS for 2025-2026—RemainCo could reach $75-80 per share.
In an optimistic scenario, with execution on growth and capital allocation, EPS could reach $8.80 by 2028, supporting a 13-14x multiple for a $115-123 stock price. Aptiv’s transformation positions RemainCo as a higher-margin, more diversified industrial and automotive supplier, with both intrinsic value and upside optionality from strategic asset allocation, making it an attractive opportunity for investors seeking growth with value characteristics.
Previously we covered a bullish thesis on Aptiv PLC (APTV) by afgtt2008 in September 2024, highlighting its strong position in traditional and EV markets, robust new business bookings, and potential shareholder returns. The stock has appreciated by about 12.63% since coverage. The thesis still stands as fundamentals remain solid. Value Don’t Lie shares a similar view but focuses on the spin-off of the lower-margin wire harness business, creating higher-margin RemainCo.