Goldman Sachs’ Stocks With Highest Consensus Returns: 42 Stocks With The Highest Consensus ROE

26. Aptiv PLC (NYSE:APTV)

Consensus ROE: 13%

Number of Hedge Fund Investors in Q2 2024: 38

Aptiv PLC (NYSE:APTV) is an American origin auto parts manufacturer headquartered in Dublin, Ireland. It focuses on making and selling vehicle electrical systems, safety sensors, and other associated products. Since Aptiv PLC (NYSE:APTV) exclusively targets the car industry, any slowdown in the cyclical sector means that the firm’s stock also struggles. Consequently, the shares are down 21% year to date and have lost 28% over the past twelve months. Aptiv PLC (NYSE:APTV) also suffers from the fact that it markets itself as the only company capable of providing a car’s end to end system. This, coupled with its reliance on the auto industry, led to a massive 13.7% drop in June after one of its biggest customers Volkswagen announced that it was investing $5 billion in electric car company Rivian. This worried investors that Aptiv PLC (NYSE:APTV) was losing its competitive moat which led to the share price drop. These shifts have also led to the narrative around the stock shifting to cost control, with the firm’s midpoint operating income guidance of 11.95% for the full year and EPS guidance of $6.35 playing a key role in sustaining its current share price valuation.

ClearBridge Investments mentioned Aptiv PLC (NYSE:APTV) in its Q3 2024 investor letter. Here is what the fund said:

“Lastly, we sold our position in tier 1 automotive parts supplier Aptiv PLC (NYSE:APTV). Part of our original investment thesis for Aptiv was that the company should garner a premium multiple versus competitors as its product portfolio was well-positioned to take share as auto production shifted toward electric vehicles. However, weak global auto demand and slowing mix shift toward EVs has pressured Aptiv’s business and the company is capturing share at a slower rate than we anticipated. While Aptiv has executed well on profitability and trades at a cheap valuation, we do not foresee the same level of multiple expansion as the company’s growth relative to the market remains weak.”