The Corporate Restructuring Report-Aptiv Plc (APTV) Update
On December 4th, 2017, Delphi Automotive Plc (DLPH) completed the tax-free spin-off of its Powertrain Systems business into a separate public company. The spin-off was name Delphi Technologies Plc, while the parent was renamed Aptiv Plc (APTV). APTV focuses on future driving trends around electrificaton, autonomous driving and connected services. In our note dated December 4th, 2017, we had a positive view on APTV and we continue to remain bullish on its prospects.
In our view, APTV is well positioned to capture new growth opportunities from future driving trends around electrification, autonomous driving and connected services. APTV is expected to grow faster than the automobile market and generate an operating cash flow of $2 - $2.5 billion by 2020. We expect margins to expand by ~100 bps by 2020 on the back of continued focus on operational efficiency. Recent moves including partnership with Mobileye and acquisition of nuTonomy strengthens its position in the autonomous driving space. Strong capital allocation track record should limit the downside. In our view, APTV is undervalued at current levels.
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