Why Delphi Automotive (DLPH) Stock Is Gaining Today

NEW YORK (TheStreet) -- Delphi Automotive (DLPH) shares are up 0.3% to $71.64 on Tuesday after the auto parts manufacturer announced that its CEO Rodney O'Neal will retire in March 2015 and be replaced by CFO Kevin Clark.

Delphi Automotive has experienced much scrutiny this year after being entangled in the General Motors (GM) ignition switch failure that resulted in 13 deaths and over 2 million vehicles recalled.

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Delphi has been manufacturing the replacement switches for the recalled vehicles since earlier this year.

TheStreet Ratings team rates DELPHI AUTOMOTIVE PLC as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate DELPHI AUTOMOTIVE PLC (DLPH) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, revenue growth, good cash flow from operations and increase in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 8.9%. Since the same quarter one year prior, revenues slightly increased by 5.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • DELPHI AUTOMOTIVE PLC has improved earnings per share by 7.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, DELPHI AUTOMOTIVE PLC increased its bottom line by earning $3.89 versus $3.32 in the prior year. This year, the market expects an improvement in earnings ($5.10 versus $3.89).
  • Net operating cash flow has increased to $627.00 million or 19.88% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -23.02%.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500, but is less than that of the Auto Components industry average. The net income increased by 4.1% when compared to the same quarter one year prior, going from $367.00 million to $382.00 million.
  • You can view the full analysis from the report here: DLPH Ratings Report

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