Pole Position "UBS European & US Autos Daily" Hummel

研报英文原文证据摘录

Pole Position "UBS European & US Autos Daily" Hummel

stimate that current S&P forecast weighted for APTV regional exposure

shows +150bps), abatement of 3 China program roll-offs and Ford Novelis

headwind +150bps, product ramps/launches +300bps. The h/h product ramps are

driven by active safety programs with top 2 OEMs in China that already started in

1Q so currently ramping, and major NA OEM ADAS upgrades that also started

already but more in 2H. Meanwhile, on EBITDA, where 2H26 margins imply

19.5%, +180bps from 1H26's 17.7% guidance (+$160mm h/h), we would say

~50% is volume driven, ~20% is commodity recovery driven, with the remainder a

combination of lower stranded costs, mix, engineering timing and productivity.

Management thought that 2H26 was a better starting point to think about 2027

margins.

Strong FCF generation, but some investor concern on uses of cash.

APTV guided 2026 FCF to ~$750mm but this includes ~$250mm of separation

costs as well as ~$200mm of semis inventory build. So the more normalized

number is closer to ~$1.2bn, which means that even without 2027 improvement,

could be looking at ~$2bn of cumulative FCF over '26-27 (~18% of current

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.