Aptiv Stock Declines 21% Year to Date: Is This a Buying Opportunity?

Zacks09-26 23:29

Aptiv PLC APTV has seen its stock decline 21.3% year to date, a significant drop compared to the 29.3% rally in the industry it belongs to and a 20.2% rise in the Zacks S&P 500 composite. This decline...

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But is this the right time to buy APTV?Aptiv's current ratio  was at 1.49 at the end of the second quarter of 2024 compared with the industry’s 0.92. A current ratio of more than 1 indicates that the company should be easily paying off its short-term obligations.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"SGXZ81514606.USD":"大华环球创新基金A Acc USD","LU1712237335.SGD":"Natixis Mirova Global Sustainable Equity H-R-NPF/A SGD","SGXZ51526630.SGD":"大华环球创新基金A Acc SGD","BK4566":"资本集团","LU2249611893.SGD":"BNP PARIBAS ENERGY TRANSITION \"CRH\" (SGD) ACC","LU1721428933.USD":"法巴全球经典环境基金RH MD Dis","LU1623119135.USD":"Natixis Mirova Global Sustainable Equity R-NPF/A USD","MGA":"曼格纳国际","BK4588":"碎股","LU0823414478.USD":"法巴经典能源转换基金","LU1861214812.USD":"Blackrock Future of Transport A2 USD","LU1861219969.SGD":"Blackrock Future of Transport A2 SGD-H","BK4561":"索罗斯持仓","LU0757428866.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AE\" (USD) ACC","LU2360107325.USD":"BGF FUTURE OF TRANSPORT \"A4\" (USD) INC","BK4504":"桥水持仓","BK4511":"特斯拉概念","VC":"伟世通","BK4124":"机动车零配件与设备","LU1815336091.USD":"THREADNEEDLE (LUX) GLOBAL SMALLER COMPANIES \"AUP\" (USD) INC","BK4585":"ETF&股票定投概念","SGXZ99366536.SGD":"United Global Innovation A Acc SGD-H","LU0390134368.USD":"FRANKLIN GLOBAL GROWTH \"A\" (USD) ACC","APTV":"Aptiv PLC"},"translate_title":"Aptiv股价今年迄今下跌21%：这是买入机会吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"VC":1,"MGA":1,"APTV":0.9},"content_text":"Aptiv PLC APTV has seen its stock decline 21.3% year to date, a significant drop compared to the 29.3% rally in the industry it belongs to and a 20.2% rise in the Zacks S&P 500 composite.\nThis decline aligns with the performance of its closest competitors, Magna International MGA, which has fallen by 31.7% and Visteon Corporation VC, which has dropped 24.7% over the same period.\nGiven the recent weakness in APTV shares, investors might be tempted to buy the stock. But is this the right time to buy APTV? Let’s find out.\nYear-to-Date Price Performance\nImage Source: Zacks Investment Research\nA Lowered Outlook Signals Trouble\nAptiv has lowered its 2024 revenue guidance by $900 million at midpoint in the second quarter of 2024, reflecting ongoing weaknesses in global vehicle production and reductions in powertrains.\nAPTV’s second-quarter 2024 revenues declined 2% year over year on an adjusted basis, hampered by slowing vehicle production impacting the company’s electrical distribution and user experience product lines.\nThe company's Signal and Power Solutions segment is experiencing challenges, with revenues declining 5% year over year in the second quarter of 2024, reflecting weakness in the electrical distribution product line due to lower volumes at select customers.\nStrategic Response and Long-term Prospects\nDespite these macroeconomic headwinds, Aptiv remains optimistic about its long-term prospects. The company anticipates that cost-saving measures and performance actions will continue to provide benefits, partially offsetting the negative impacts of lower volumes. The company’s adjusted operating income increased 14.3% year over year in the second quarter of 2024, representing an adjusted operating income margin of 12%, up 180 basis points year over year. These gains were driven by manufacturing and engineering performance, and lower supply chain disruption costs.\nIn response to the softness of vehicle production schedules, Aptiv has initiated additional cost-saving measures expected to generate an extra $50 million in savings through the rest of the year. To address labor inflation, the company is consolidating its manufacturing footprint and shifting more operations to Central America and North Africa. Additionally, Aptiv is modifying vehicle architecture designs to increase automation in manufacturing processes, targeting 30% automation of standard labor hours by 2026 and over 50% by 2030.\nAnother positive development is the company's decision to double its share repurchase target from $750 million to $1.5 billion in 2024. This move reflects Aptiv's confidence in its competitive position and long-term business value, reaffirming its commitment to delivering value to shareholders.\nAptiv's current ratio (a measure of liquidity) was at 1.49 at the end of the second quarter of 2024 compared with the industry’s 0.92. A current ratio of more than 1 indicates that the company should be easily paying off its short-term obligations.\nHold Off for a More Favorable Entry Point\nAptiv is well-positioned in the connected cars market, with strong system integration expertise that enables it to capitalize on growing trends in electrification, connectivity and autonomy within the automotive sector. However, the continued softness in vehicle production indicates that these benefits may not materialize in the near term.\nA weak guidance is quite a strong indicator of APTV’s weak financial performance, at least in the near term. The company expects continued weakness in vehicle production. This may not lift investor optimism any time soon and the stock may undergo further correction.\nGiven this backdrop, it may not be a bad idea to wait for a better entry point rather than rushing to purchase the stock right now. This would allow time to evaluate whether Aptiv's current response actions and their projected outcomes prove effective.\nAptiv currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.\nWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report\nMagna International Inc. (MGA) : Free Stock Analysis Report\nVisteon Corporation (VC) : Free Stock Analysis Report\nAptiv PLC (APTV) : Free Stock Analysis Report\nTo read this article on Zacks.com click here.\nZacks Investment Research","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.28.1","shortVersion":"4.28.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2470750394"}