The ‘New” Delphi Automotive will dominate peers, says Jefferies
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The ‘New” Delphi Automotive will dominate peers, says Jefferies

It’s now old news that auto parts giant Delphi Automotive has renamed its business Aptiv PLC, and decided to focus on self-driving technologies. The business left behind – Delphi’s “traditional' business, if you like – was spun off and renamed Delphi Technologies PLC. According to Jefferies analysts, this “old new” Delphi is one to watch, and is set to dominate its peers over the next few years.

In just five days, Delphi’s share price has risen by 11%

graph 1222 delphi

SOURCE: Yahoo Finance

Jefferies says that Delphi will have a “favourable capital return” that will translate into a “50-basis point margin expansion” and 10% compound annual growth in earnings before interest and tax through to 2020. The reasoning is pretty simple: while self-driving tech may be the next big thing for automakers, Delphi’s core auto parts business will remain as relevant as ever – and the company has the pedigree to continue its run of dominance in the industry.

David Kelley, a Jefferies analyst, explained his view in a note issued on Monday. He said: “Although EV customer insourcing remains a risk, plus-30-percent market growth suggests considerable greenfield opportunity. Regardless, our bias to incremental electrification and more affordable hybrids to 2022 is a ‘best case’ scenario for DLPH given opportunity to supply to the downsized ICE [via variable valve train and gas direct injection] and the battery system [power electronics].


Dominion holds Delphi Technologies in its Global Trends Managed Fund.

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