Delphi Automotive (DLPH) PT Lifted at Citi Following Management Meeting

Citi analyst Itay Michaeli reiterated a Buy rating and boosted his price target on Delphi Automotive PLC (NYSE: DLPH) to $84.00 (from $78.00) Tuesday following meetings with management with reinforced its "car of the future" exposure.

Following meetings with the CEO and others, Michaeli said, " We walked away with added confidence in the story and are consequently raising our price target and reiterating Delphi as a top-3 supplier pick. Delphi is also exposed to "Car of the Future" trends."

Key takeaways cited by the analyst were:

• We heard a message of consistency both around the business environment and the prior 2016 targets. Management remains focused on pursuing disciplined growth and steady margin expansion through volume flow-through, material savings and cost efficiencies. Consider that our 2016E EPS of $6.71(> consensus) is broadly consistent with what’s implied in the company’s 2016 outlook, and does not incorporate significant cash deployment. With cash deployment, we estimate PF 2016 EPS might approach or exceed $7, placing the stock at a mere ~10x P/E currently. What our meetings reinforced was Delphi’s strong and mult-layered positioning for many “Car of the Future” trends well beyond 2016. First, the company’s GDCI engine technology, which is still in development, has the potential to become somewhat of a game-changer in delivering diesel-like fuel economy on a gasoline engine (+25-30%).
• Second is ADAS, or Active Safety, which we continue to regard as perhaps the most attractive vertical in automotive today. Considering that the ADAS market is poised to inflect even faster around mid-decade, we estimate that this also game-changing technology should contribute far more meaningfully to Delphi’s late-decade backlog.
• Third, Delphi reminded us that hybrids & EVs remain a content opportunity, not a threat, as even a hypothetical vehicle conversion from diesel to EV wouldn’t likely result in any content loss.

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 $70.00 yesterday.

You May Also Be Interested In

• Keurig Dr Pepper (KDP) PT Raised to $39 at Jefferies
• Bristol-Myers Squibb Co. (BMY) PT Lowered to $64 at Truist Securities
• Parade Technologies Ltd. (4966:TT) PT Lowered to NT$870 at Nomura/Instinet