10 Undervalued Cyclical Stocks to Buy According to Analysts

6. Aptiv PLC (NYSE:APTV)

Forward PE ratio as of September 11: 8.79

Average Analyst Price Target Upside Potential: 38.13%

Number of Hedge Fund Holders: 38

Aptiv PLC (NYSE:APTV) is a company that designs, manufactures, and sells vehicle components. It also provides electrical, electronic, and safety technology solutions to the automotive and commercial vehicle markets. The company also develops innovative solutions that enhance the safety, environmental sustainability, and connectivity of transportation.

It is one of the best undervalued cyclical stocks to buy, according to analysts, as it is one of the companies ushering in the next generation of active safety autonomous vehicles. Even though there was a decrease in spending on electric vehicles (E.V.) and sophisticated driver-assistance technologies (ADAS) areas, Aptiv PLC (NYSE:APTV) reported its highest profits for the second quarter of 2024, even though its revenue fell by 2%.

Revenue in the second quarter totaled $10 billion as net income totaled $1.16 billion, leading to a net income margin of 11.6%. This achievement was mainly because of strong performance and lower expenses related to the supply chain.

Aptiv PLC (NYSE:APTV) is trading at low earnings multiple, with an adjusted P/E ratio of 9, suggesting that the stock might be undervalued relative to its earnings capacity. Likewise, the company has already confirmed a $5 billion buyback program as part of an effort to return value to shareholders.

In the second quarter, 38 hedge funds held long positions in Aptiv PLC (NYSE:APTV), with a combined stake value exceeding $1 billion. Impax Asset Management was the largest shareholder, owning 6.23 million shares. Based on 15 Wall Street analysts, Aptiv commands an average buy rating and a $90.31 price target implying, 38.13% upside potential.

ClearBridge Investments mentioned Aptiv PLC (NYSE:APTV) in its first-quarter 2024 investor letter. Here is what it said:

“Stock selection in the consumer discretionary sector was the leading detractor from relative performance, driven by idiosyncratic issues within a handful of holdings. Automotive parts supplier Aptiv PLC (NYSE:APTV) faced pressure as headwinds to the broader auto-cycle and a slowing in electric vehicle adoption weighed on margins. However, we believe that the company’s above-market growth, combined with opportunity for margin expansion, are compelling at its current valuation as the auto-cycle rebounds.”