Deutsche Bank Expresses 'Strong Conviction' in Delphi Automotive (DLPH), Raises PT to $90
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Price: $17.02 --0%
Rating Summary:
11 Buy, 17 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
11 Buy, 17 Hold, 0 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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Deutsche Bank reiterated a Buy rating on Delphi Automotive (NYSE: DLPH) and raised its price target to $90.00 (from $75.00). Analyst Rod Lache said he has "strong conviction" in the stock.
"We expect an 8.5% revenue CAGR, and a 12.5% EBIT CAGR through 2016 based on secular trends affecting their businesses, details of new business wins, and expected cost structure trends. And we continue to believe that Delphi will deploy virtually all of their $1.1bn-$1.7bn annual free cash flow (5.2%-8.1% free cash flow yield) towards dividends and buybacks (accelerating vs. this year), which should provide investors with annual returns in the 20% range even before any multiple expansion. We reiterate our Buy recommendation based on valuation," said Lache.
"We continue to believe that Delphi is one of the most favorably positioned Auto Suppliers in our universe, given their exposures to strong secular growth in Fuel Economy (Powertrain Division is 30% of sales), Infotainment and Active Safety (Electronics & Safety is 20% of sales), Electrical Architecture/Electrification (40% of sales), and China (15% of sales). And we continue to believe that above average margins and returns will distinguish Delphi from the pack. Over two days of meetings (and a recent trip to DLPH’s HQ in Detroit), management reinforced their commitment to strategies that will sustain their pricing/margin premium, and they allayed concerns that we had about certain segments (i.e. E&S) that are more fragmented and/or undefined," he added.
For an analyst ratings summary and ratings history on Delphi Automotive PLC click here. For more ratings news on Delphi Automotive PLC click here.
Shares of Delphi Automotive PLC closed at $67.77 yesterday.
"We expect an 8.5% revenue CAGR, and a 12.5% EBIT CAGR through 2016 based on secular trends affecting their businesses, details of new business wins, and expected cost structure trends. And we continue to believe that Delphi will deploy virtually all of their $1.1bn-$1.7bn annual free cash flow (5.2%-8.1% free cash flow yield) towards dividends and buybacks (accelerating vs. this year), which should provide investors with annual returns in the 20% range even before any multiple expansion. We reiterate our Buy recommendation based on valuation," said Lache.
"We continue to believe that Delphi is one of the most favorably positioned Auto Suppliers in our universe, given their exposures to strong secular growth in Fuel Economy (Powertrain Division is 30% of sales), Infotainment and Active Safety (Electronics & Safety is 20% of sales), Electrical Architecture/Electrification (40% of sales), and China (15% of sales). And we continue to believe that above average margins and returns will distinguish Delphi from the pack. Over two days of meetings (and a recent trip to DLPH’s HQ in Detroit), management reinforced their commitment to strategies that will sustain their pricing/margin premium, and they allayed concerns that we had about certain segments (i.e. E&S) that are more fragmented and/or undefined," he added.
For an analyst ratings summary and ratings history on Delphi Automotive PLC click here. For more ratings news on Delphi Automotive PLC click here.
Shares of Delphi Automotive PLC closed at $67.77 yesterday.
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