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The Zacks Consensus Estimate for earnings in the to-be-reported quarter stands at $1.37 per share, indicating a year-over-year increase of 9.6%. The consensus mark for revenues is pegged at $5.32 billion, indicating year-over-year growth of 2.3%.
Four estimates for the to-be-reported quarter moved south over the past 30 days versus no northward revisions. Over the same period, the Zacks Consensus Estimate for earnings has decreased 2.1%.
Image Source: Zacks Investment Research
APTV’s earnings surprise history has been impressive. Earnings beat the Zacks Consensus Estimate in all the four trailing quarters, the average surprise being 12.2%.
Image Source: Zacks Investment Research
Lesser Chance of Earnings Beat This Time
Our proven model doesn’t conclusively predict an earnings beat for Aptiv this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
APTV has an Earnings ESP of -1.18% and a Zacks Rank #4 (Sell).
Segmental Revenues, Operating Performance are Factors to Watch
The top line in the to-be-reported quarter is likely to have benefited from modest growth in both the Advanced Safety & User Experience and Signal & Power Solutions segments’ revenues. The consensus estimate for Advanced Safety & User Experience revenues is pegged at $3.74 billion, calling for a year-over-year increase of 1.8%. The consensus mark for the Signal & Power Solutions segment’s revenues stands at $3.6 billion, suggesting year-over-year growth of 1%.
The bottom line is expected to have benefited from operating strength. The consensus estimate for Advanced Safety & User Experience’s adjusted operating income is pegged at $441.9 million, suggesting year-over-year growth of 12.7%. The consensus mark for the Signal & Power Solutions segment’s adjusted operating income stands at $3.6 billion, suggesting year-over-year growth of 13.3%.
The Stock Has Been Dipping
APTVhas seen its stock decline 24.6% year to date, a significant drop compared to the 13.9% rally in the industry it belongs to and the 14.3% growth of the Zacks S&P 500 composite.
Year-to-Date Price Performance
Image Source: Zacks Investment Research
This decline aligns with the performance of its closest competitors, Magna International (MGA - Free Report) , which has fallen by 26%, and Visteon Corporation (VC - Free Report) , which has dropped 8.1% over the same period.
Aptiv's downward trajectory is primarily due to several challenges facing the global automotive industry. These include a slowdown in electrification momentum, growing labor and material costs, geopolitical tensions and economic volatility. These factors have collectively contributed to investor concerns and the stock's poor performance.
Investment Considerations
Aptiv 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 EV production schedules indicates that these benefits may not materialize in the near term.
Aptiv had lowered its 2024 revenue guidance by $450 million, reflecting ongoing weaknesses in electric vehicle (EV) production, significant customer schedule reductions, and negative impacts from foreign exchange rates. Slowing EV production in North America and Europe, increased labor inflation, and currency fluctuations have been weighing on the company’s revenues for some time.
Steer Clear of APTV
A weak guidance is quite a strong indicator of APTV’s weak financial performance, at least in the near term. The company expects a continued weakness in EV production and labor inflation. This may not lift investor optimism any time soon and the stock may undergo further correction, especially when APTV does not seem poised for an earnings beat. Given this backdrop, it may not be a bad idea to sell the stock right now.
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Should You Buy, Sell, or Hold Aptiv (APTV) Before Q2 Earnings?
Aptiv PLC (APTV - Free Report) is set to report its second-quarter 2024 results on Aug 1, before the bell.
The Zacks Consensus Estimate for earnings in the to-be-reported quarter stands at $1.37 per share, indicating a year-over-year increase of 9.6%. The consensus mark for revenues is pegged at $5.32 billion, indicating year-over-year growth of 2.3%.
Four estimates for the to-be-reported quarter moved south over the past 30 days versus no northward revisions. Over the same period, the Zacks Consensus Estimate for earnings has decreased 2.1%.
APTV’s earnings surprise history has been impressive. Earnings beat the Zacks Consensus Estimate in all the four trailing quarters, the average surprise being 12.2%.
Lesser Chance of Earnings Beat This Time
Our proven model doesn’t conclusively predict an earnings beat for Aptiv this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter.
APTV has an Earnings ESP of -1.18% and a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Segmental Revenues, Operating Performance are Factors to Watch
The top line in the to-be-reported quarter is likely to have benefited from modest growth in both the Advanced Safety & User Experience and Signal & Power Solutions segments’ revenues. The consensus estimate for Advanced Safety & User Experience revenues is pegged at $3.74 billion, calling for a year-over-year increase of 1.8%. The consensus mark for the Signal & Power Solutions segment’s revenues stands at $3.6 billion, suggesting year-over-year growth of 1%.
The bottom line is expected to have benefited from operating strength. The consensus estimate for Advanced Safety & User Experience’s adjusted operating income is pegged at $441.9 million, suggesting year-over-year growth of 12.7%. The consensus mark for the Signal & Power Solutions segment’s adjusted operating income stands at $3.6 billion, suggesting year-over-year growth of 13.3%.
The Stock Has Been Dipping
APTVhas seen its stock decline 24.6% year to date, a significant drop compared to the 13.9% rally in the industry it belongs to and the 14.3% growth of the Zacks S&P 500 composite.
Year-to-Date Price Performance
This decline aligns with the performance of its closest competitors, Magna International (MGA - Free Report) , which has fallen by 26%, and Visteon Corporation (VC - Free Report) , which has dropped 8.1% over the same period.
Aptiv's downward trajectory is primarily due to several challenges facing the global automotive industry. These include a slowdown in electrification momentum, growing labor and material costs, geopolitical tensions and economic volatility. These factors have collectively contributed to investor concerns and the stock's poor performance.
Investment Considerations
Aptiv 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 EV production schedules indicates that these benefits may not materialize in the near term.
Aptiv had lowered its 2024 revenue guidance by $450 million, reflecting ongoing weaknesses in electric vehicle (EV) production, significant customer schedule reductions, and negative impacts from foreign exchange rates. Slowing EV production in North America and Europe, increased labor inflation, and currency fluctuations have been weighing on the company’s revenues for some time.
Steer Clear of APTV
A weak guidance is quite a strong indicator of APTV’s weak financial performance, at least in the near term. The company expects a continued weakness in EV production and labor inflation. This may not lift investor optimism any time soon and the stock may undergo further correction, especially when APTV does not seem poised for an earnings beat. Given this backdrop, it may not be a bad idea to sell the stock right now.