RBC Capital analysts provided their key takeaways from Aptiv PLC (NYSE:APTV) Investor Day, highlighting that the company’s fully integrated solution set is a point of differentiation and offers a cost savings value proposition.
According to the analysts, the strategy provides exposure to a TAM (Total Addressable Market) that the company expects to grow by 20% to $150 billion in 2025 in core markets with an additional $200 billion long-term TAM upside opportunity in adjacent markets and L4/L5 autonomy.
According to the analysts, the 2025 margin outlook was better than the consensus expectations and importantly appears more derisked. The analysts believe the company’s integrated portfolio of solutions, which enables them to offer a more comprehensive set of solutions than peers and at a lower cost, is supportive of a continuation of the 8-10% gross operating margin target.
For 2025, the company targets revenues of $23-$24 billion, compared to the Street estimate heading into the investor day at $24.6 billion. While the revenue guide is below consensus, operating income is expected to grow to $3.2-$3.5 billion with margins of 14%-14.5%, and above the Street estimates of $3.1 billion and margins of 12.5%.