RBC Capital analysts provided their key takeaways from Aptiv PLC (NYSE:APTV) meeting with the company’s CFO Joe Massaro.
The company is still calling for a 1% global production decline for 2023 vs IHS Markit’s 3.5% level and Volkswagen’s 15% volume growth expectation.
The analysts tend to agree with Aptiv as its SPS division is in one out of every three vehicles on the globe and the company gets a 12-week rolling forecast from its OEM customers. Further, the analysts think Volkswagen overshot on its forecast given it only expects a low single-digit decline in price/mix.
The company expects to stay at investment grade and rating agencies understand that much of the leverage has come from recent M&A. Further, $1 billion of debt is prepayable and the company has pushed out maturities. Finally, the company’s 2025 and 2030 forecast is robust and defended by the fact that the company books business 2-3 years out and programs last 5-7 years.