Results: Aptiv PLC Beat Earnings Expectations And Analysts Now Have New Forecasts

Aptiv PLC (NYSE:APTV) shareholders are probably feeling a little disappointed, since its shares fell 3.0% to US$83.50 in the week after its latest full-year results. Revenues were US$20b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$10.39, an impressive 29% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Aptiv

Taking into account the latest results, the consensus forecast from Aptiv's 20 analysts is for revenues of US$21.5b in 2024. This reflects a satisfactory 7.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to dive 58% to US$4.31 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$21.7b and earnings per share (EPS) of US$4.69 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

The consensus price target held steady at US$109, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Aptiv analyst has a price target of US$155 per share, while the most pessimistic values it at US$69.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We can infer from the latest estimates that forecasts expect a continuation of Aptiv'shistorical trends, as the 7.2% annualised revenue growth to the end of 2024 is roughly in line with the 7.8% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 10% annually. So although Aptiv is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Aptiv going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 2 warning signs for Aptiv (1 is potentially serious!) that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.