APTIV PLC (APTV): what the price requires
At today's price, APTIV PLC (APTV) is priced for +3.0% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/APTV
Headline
| Field | Value |
|---|---|
| Ticker | APTV |
| Company | APTIV PLC |
| Current price | $59.41/sh |
| Composition | Active Safety 15% / Smart Vehicle Compute and Software 3% / User Experience and Other 11% / Eliminations (Advanced Safety and User Experience) 0% / Engineered Components Group 33% / Electrical Distribution Systems 43% / Eliminations (intersegment) -4% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 2.6% |
| Operating margin today | 5.4% |
| Margin compression implied | -2.8pp |
| Implied growth | 3.0% |
| Multiple paid | 16x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.2% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.6pp.
Reconcile: at the x-ray's 9.3% required return this reads ~9.7%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.06σ |
| cohort percentile (of 210 peers) | 40 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 4.05x | 5 | expensive |
| Earnings | 2.50x | 5 | expensive |
| Relative | 0.84x | 5 | justifies |
| Growth | 0.78x | 2 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 5.5%); the inversion above states its own rate.
Per-Model Detail (n=17)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | — | — | no | — |
| DCF Exit Multiple | Growth | $104.68 | 0.57x | yes | Exit EV/EBITDA: 7.2x / 9.2x / 11.2x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $70.54 | 0.84x | yes | P/E 24.44x (blended: static sector reference 20x + trailing (TTM) 35x), scenarios: 20.4x / 24.4x / 28.4x (bear / base = reference held flat / bull), EV/EBITDA 13x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $18.46 | 3.22x | yes | BV/sh $43.19, ROE (TTM) 4.0%, ke 9.3% |
| Two-Stage Excess Return | Asset | $11.74 | 5.06x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $59.56 | 1.00x | yes | Rev $20.7B, growth 5% (input: historical growth; tapered), Terminal P/S: 0.5x / 0.6x / 0.7x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $20.28 | 2.93x | yes | EPS $1.69, growth 2% (input: historical EPS growth), PEG=17.40 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $106.40 | 0.56x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.69B × (1−21%) / WACC 5.5% → EPV (no growth) |
| Residual Income | Asset | $9.20 | 6.46x | yes | BV $43.19 + 5yr PV of (ROE (TTM) 4.0% − Kₑ 9.3%) × BV; BV grows 2.6%/yr |
| Graham Number | Asset | $40.52 | 1.47x | yes | √(22.5 × EPS $1.69 × BVPS $43.19) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $97.08 | 0.61x | yes | EBITDA $2.11B × sector EV/EBITDA 13.0x |
| FCF Yield | Earnings | $23.77 | 2.50x | yes | FCF $1091.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $17.14 | 3.47x | yes | SBC-adj FCF $0.96B (FCF $1.09B − SBC $0.13B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $54.53 | 1.09x | yes | EPS $1.69 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $14.67 | 4.05x | yes | BV $43.19 × (ROIC 1.9% / WACC 5.5%) |
| P/Sales Sector | Relative | $144.94 | 0.41x | yes | Revenue $20.66B × sector P/S 1.5x |
| PEG Fair Value | Relative | $63.38 | 0.94x | yes | EPS $1.69 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $18.27 | 3.25x | yes | EPS $1.69 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $5.5b |
| Net debt / NOPAT (after-tax) | 6.25x |
| Net debt / operating income (pre-tax) | 4.93x |
| Interest coverage | 3.1x |
| Share count CAGR (buyback) | -5.8% |
| Burning cash | no |
Bullet Takeaways
- Aptiv supplies the electrical and software architecture of modern vehicles, from wiring and connectors to active-safety sensors and vehicle compute, positioned to grow as cars add content for automation, electrification, and connectivity.
- The defining recent event is structural: Aptiv separated its Electrical Distribution Systems business into a new company, Versigent, on April 1, 2026, reducing debt by about $1.8 billion and leaving a higher-margin "New Aptiv" focused on engineered components and software.
- The biggest risk is the auto cycle and pricing: first-quarter 2026 adjusted EBITDA margin slipped to 14.8% from 15.7%, driven by a foreign-exchange and commodity headwind, and the content-growth thesis depends on vehicle production and electrification staying on track.
Bull Case
Begin with the bear's central worry, because Aptiv has to answer it: it is an auto supplier, and auto suppliers live and die with vehicle production, pricing pressure from automakers, and the pace of the electrification transition that has run hotter and colder than expected. The pivot is that Aptiv has restructured itself to lean into the part of the car that is growing regardless of the cycle, the electronic and software content. The 10-K frames the strategy directly: the company offers "products that address the trends of automation, electrification and digitalization," and believes it is "well-positioned to benefit from the growing demand for vehicle content and technology related to safety, electrification, high speed data, connectivity." Content per vehicle rises even when unit volumes are flat, which is the structural growth that separates Aptiv from a commodity parts maker.
The portfolio reshaping is the bull's strongest recent move. On April 1, 2026, Aptiv completed the separation of its Electrical Distribution Systems business into Versigent, funding an $1.8 billion debt reduction from the spinoff proceeds. What remains is a higher-margin company centered on the Advanced Safety and User Experience segment, which the 10-K describes as providing "critical technologies and services to enhance vehicle safety, security, comfort and convenience, including intelligent sensors, high-performance compute," alongside engineered components. New Aptiv guides to 2026 adjusted EBITDA margin around 18.6%, structurally above the blended margin the old company carried, and the debt reduction repairs a balance sheet that had been a drag.
Capital allocation reinforces the story. Aptiv has been shrinking its share count at nearly 6% a year, a genuine buyback that concentrates the remaining business in fewer hands, and the spinoff cut leverage outright. Management also pointed to 9% nonautomotive revenue growth and double-digit software and services growth in the quarter, evidence the higher-value lines are outgrowing the legacy hardware. Against an auto-supplier cohort that includes BorgWarner, Lear, and Autoliv, the bull case is that Aptiv has deliberately become the higher-margin, software-and-safety-weighted supplier, funded its transformation by spinning out the lower-margin wiring business, and is buying back stock while it does it.
Bear Case
The bear case engages the narrative the price depends on, which is that the content-growth story outruns the auto cycle. The dependency showed its fragility in the first quarter of 2026: adjusted EBITDA margin contracted 90 basis points to 14.8%, driven by a 180-basis-point year-over-year headwind from foreign exchange and commodities. Those are exactly the inputs an auto supplier cannot control, and they hit the margin directly. The content-per-vehicle thesis is real, but it is layered on top of a business whose volumes track global vehicle production and whose pricing is negotiated against automakers under their own cost pressure. When FX and commodities move against it, the structural growth gets masked, and the price assumes the structural growth wins.
Cash flow is the more immediate concern, and it turned sharply negative. Aptiv generated operating cash flow of negative $143 million and free cash flow of negative $362 million in the quarter, against positive figures a year earlier. Some of that is timing and separation-related, but a supplier burning free cash while carrying meaningful debt is the combination that limits flexibility. Even after the spinoff's $1.8 billion debt reduction, the legacy balance sheet carried net debt around five times trailing operating income, and the static valuation methods reflect the cyclical risk: the asset-value and earnings-power lenses both flag the price as expensive, with only the relative-multiple and forward-growth lenses reaching it.
The spinoff itself introduces execution and comparability risk that the bull case glosses. Separating EDS into Versigent leaves a smaller, more concentrated New Aptiv whose results are not directly comparable to the historical company, and the value created depends on both pieces trading well and on the remaining business hitting its higher-margin guidance. The narrative dependency is specific: the price requires New Aptiv to deliver the roughly 18.6% EBITDA margin and the content-driven growth while vehicle production, electrification timing, and FX cooperate. The bear does not argue Aptiv is a bad business; it argues the price embeds a clean execution of the transformation in an industry where clean is rare, and the negative cash flow and margin contraction are early reminders of how the cycle interferes.
Valuation
The bet embedded in Aptiv's price is modest, which makes it a different kind of report from a high-flying growth name. At about 17 times operating income, the price implies roughly 6.1% annual operating-income growth for five years, a pace within what the company has delivered and consistent with content-per-vehicle gains layered on a flat-to-modest production backdrop. The market is not paying for a transformation miracle; it is paying for steady, content-driven growth from a restructured supplier. The framework reads that assumption as within range, neither stretched nor cheap, which fits a cyclical business mid-transition.
The methods split the way they do for a cyclical with a quality tilt. The relative-multiple and forward-growth lenses reach the price, reading it as reasonable on peer comparisons and on a growth path that credits the content story. The asset-value and earnings-power lenses sit above the price, calling it expensive, which reflects depressed cyclical earnings and the heavy fixed-asset base of an auto supplier rather than a true overvaluation. The honest read is that on the forward and peer lenses the price is fair, while the trailing-earnings lens looks rich because the earnings are running below mid-cycle. The recent margin contraction is the reason the trailing methods look stretched, and the spinoff is the company's attempt to lift the structural margin so the forward case carries more weight.
Solvency was the old story's weak point and is the part the spinoff most directly addressed. The separation of EDS into Versigent reduced debt by about $1.8 billion, a material deleveraging from the roughly five-times level the combined company carried, and the share count has fallen nearly 6% a year. The first-quarter free-cash-flow deficit is the offsetting caution: a supplier needs to convert earnings to cash to fund the buyback and service the remaining debt, and a negative quarter, even if partly separation-related, bears watching. Against the auto-supplier cohort, New Aptiv is positioned as the higher-margin, software-weighted name, and the price reflects a fair value on the forward economics provided the transformation delivers and the cycle does not turn against it.
Catalysts
The defining catalyst was the completion of the Electrical Distribution Systems spinoff. On April 1, 2026, Aptiv separated EDS into a new company, Versigent, using the proceeds to reduce debt by about $1.8 billion. The move reshapes Aptiv into a higher-margin business centered on engineered components, active safety, and vehicle software, and New Aptiv guided 2026 net sales to $12.8 to $13.2 billion, adjusted EPS of $5.70 to $6.10, and an adjusted EBITDA margin near 18.6%.
The first-quarter print showed both the growth lines and the cyclical pressure. Revenue was $5.1 billion with adjusted EPS of $1.71, but adjusted EBITDA margin slipped to 14.8% from 15.7% on a 180-basis-point foreign-exchange and commodity headwind, and free cash flow was negative $362 million against positive $76 million a year earlier. On the positive side, nonautomotive revenue grew 9% and software and services grew double digits, the higher-value lines the transformation is meant to emphasize.
The forward watch items are New Aptiv's margin delivery and cash conversion. Whether the remaining business hits its roughly 18.6% EBITDA margin guidance, and whether free cash flow recovers from the first-quarter deficit, are the swing factors for the transformation thesis. Beyond that, global vehicle production, the pace of electrification, and foreign-exchange movements remain the external variables with the most leverage on results, and the early trading of both Aptiv and the spun-off Versigent will show whether the separation created the value the strategy intended.
Peer Cohorts (Per Segment, With Filing Citations)
Advanced Safety and User Experience / Engineered Components Group / Electrical Distribution Systems (reported)
- BWA (BORGWARNER INC)
- (no filing in the citation store)
- LEA (LEAR CORP)
- (no filing in the citation store)
- ALV (AUTOLIV, INC.)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Aptiv Q1 2026 results, 2026 · Aptiv Q1 2026 guidance, 2026