Aptiv PLC "Takeaways from NDR with CEO/CFO" (Buy) Spak

研报英文原文证据摘录

Aptiv PLC "Takeaways from NDR with CEO/CFO" (Buy) Spak

market cap.). Management alluded to the idea that historically 30-40% has been

allocated towards share repurchases (so ~6% of cap) with the remainder being

allocated towards M&A. These deals are likely to be tuck-ins within EC ($25-

$500mm purchase price) and/or minority investments in IS. However, even on the

tuck-in side, we believe larger deals may be a lower probability given the goal

would be to diversify away from auto, but those assets trade at higher multiples.

As such, we believe it likely that share repo % of FCF could be increased.

Non-auto growth solid with some opportunities larger than they thought.

~25% of APTV's sales are "non-auto" (though ~40% of that is CV). 1Q26 non-

auto grew 9% (within 8-10% mid-term corridor), and the company is seeing

increasing opportunities particularly in robotics, space (where we believe they

already participate and have some experience via existing auto customer), drones

and BESS. Company won ~$0.9bn in non-auto business in 1Q26. Some

investment is required. For instance, they are investing ~$40mm this year in

building out commercial resources (go-to-market) to win business in these

markets. And as mentioned above, inorganic growth remains a potential avenue

here. We expect APTV to make more announcements on non-auto wins and on

their 2Q26 call to talk more about the opportunity (and provide visibility) they see

over the next 2-3 years.

China is profitable. Management addressed investor concerns over the "loss" in

China that investors (and us) were backing into utilizing information from their 10-

K when combined with information in their most recent proxy. This analysis was

described as comparing apples and pears (as they use different overhead/

corporate allocation).