Downgrading 7→6. Intelligent Systems Division president resigned Mar 30. Versigent spin-off .5B debt raise adds capital structure complexity. EV auto sector facing tariff headwinds on parts/components. Thesis intact long-term but near-term execution risk elevated. Entry target unchanged.
Downgrading 8→7. Javed Khan (Intelligent Systems President) resigning March 30 is a leadership risk at the most important division for the thesis. Versigent spin is on track but losing the key executive driving ADAS/autonomy strategy creates near-term uncertainty. Spin catalyst intact but execution risk elevated until successor named. Revisit after Khan successor announced.
Upgraded from 7 to 8. Automotive supplier with 83.8% DCF P(above current) — model is strongly bullish. Analyst consensus upside 39%. Both signals align. Stock is below 200dma ($72 vs $77) which provides favorable technical setup for entry. Thesis: EV content growth and software-defined vehicle architecture create durable margin expansion path. Clear thesis + 39% analyst upside + DCF P(above)>80% + favorable technical entry = conv-8 criteria met.
FY2025 operational execution solid: .4B rev, 12% adjusted op margin, .22B EBITDA, .70 adj EPS (vs $0.75 GAAP due to Wind River $648M impairment). EDS spin (M cost) sharpens focus on higher-margin software stack, compute, sensors. Post-spin margin expansion (12% → 18.6% EBITDA) reflects EDS exit (lower margin, capital intensive) + mix shift to autonomy/electrification. Tariff impact ($10%+ on US exposure) meaningful but manageable within guidance. Mexico labor escalation (13% Jan 2026) already factored. D/E 0.94x, Debt/EBITDA 3.06x - manageable. Moat strengthens post-spin: hardware-software-systems integration reduces OEM complexity; L2/L3 pricing ($1000-3000 vs $300 L1) is secular winner. Bookings $27B show demand. Prior concern about execution drag through Apr2026 spin remains, but clear catalysts (margin expansion, autonomy ramp, tariff pass-through). Raising conviction 6→7 on clearer post-spin value creation.
Fair Value Distribution — percentile bands
87.4% of simulations place fair value above current price
WHAT IS PRICED IN
Revenue-Based Reverse DCF
-1.1%/yr
±4.4% · revenue growth to justify current price
FCF-Based Reverse DCF
4.3%/yr
±2.7% · FCF growth to justify current price
THE GAP
Market pricing margin compression or rising capex
KEY VALUE DRIVERS
Spearman correlation — what moves this valuation most
Conv 8. EV content growth thesis: software-defined vehicles increase $/car substantially. DCF P(above)=83.8%, analyst 39% upside. Spin catalyst (SoP separation) confirmed in 10-K. Cheap at 7.4x forward P/E.
Terrible technicals: tech score -4, below 200dma, MACD -0.13, 5d flat. EV market is slowing globally. Automotive cycle risk real. Caution regime — zero setup here.
EV adoption stalls, SoP spin delayed/cancelled, Detroit OEM demand decline, tariff escalation on autos
Updated Mar 18
Javed Khan, EVP & President of Intelligent Systems (ADAS/autonomy division), resigns March 30 to become CEO of a software/AI company. Leadership loss at the highest-value division is a thesis risk to ...
FY2025 10-K confirms record adj. OI $2,461M (12.1% margin), $20.4B revenue (+3.5%). Versigent (EDS) spin April 1 confirmed with debt priced. Post-spin New Aptiv (ASUX+ECG) targets 18.6% EBITDA vs 12% ...
Versigent spin confirmed April 1 with debt financing priced early March. New Aptiv (ASUX+ECG) FY26 adj EPS guide .70-6.10 at current implies 12x P/E — historically cheap for an industrial tech compan...
10-K confirms FY2025 record results: $20.4B revenue (+3%), $2,461M adj OI (12.1% margin, record), adj EPS $7.82 (+25% yoy). Wind River $648M goodwill impairment non-cash. ASUX segment stalling (flat r...
FY2025 confirms the spin thesis — Versigent EDS separation on track for April 1 (record date March 17). NuAptiv post-spin will show 18.6% adj EBITDA margin vs 12% blended today, a step-change that sho...
FY2025: .4B rev (+3.5%), record adj. OI .461B (12.1% margin), but M Wind River goodwill impairment dragging GAAP to M net income. Versigent spin confirmed April 1 (record Mar 17). NuAptiv post-spin: ....
FY2025 operational excellence (20.4B rev, 15.8% EBITDA) confirms scale moat. EDS spin (Apr 2026) shifts to higher-margin software-first positioning with 18.6% post-spin EBITDA target. Autonomy (L2/L3)...
Aptiv 10-K shows solid global scale but facing cyclical headwinds, separation costs, and execution risks. Wind River impairment (M) flags software strategy challenges. EDS spin-off creates transition ...