Shares of Delphi Automotive are declining 4.67% to $76.95 in mid-morning trading on Thursday.
The firm also lowered its 2015 earnings estimates to $5.16 per share from $5.31 per share. For 2016 the firm cut its estimates to $5.77 per share from $6.20 per share.
With negative earnings revisions likely to emerge in China's market, and with macro concerns and risks of program delays likely to linger through at least the end of the year, the firm is concerned that Delphi is still facing a challenging recovery.
"While Delphi still offers an impressive EPS growth story even in the face of the China headwinds, we fear that the content growth story may be somewhat constrained if programs are delayed," Barclays analysts said.
Separately, TheStreet Ratings team rates DELPHI AUTOMOTIVE PLC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DELPHI AUTOMOTIVE PLC (DLPH) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its notable return on equity and solid stock price performance. We feel its strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Auto Components industry and the overall market, DELPHI AUTOMOTIVE PLC's return on equity significantly exceeds that of both the industry average and the S&P 500.
- DELPHI AUTOMOTIVE PLC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DELPHI AUTOMOTIVE PLC increased its bottom line by earning $4.43 versus $3.89 in the prior year. This year, the market expects an improvement in earnings ($5.36 versus $4.43).
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period, despite the company's weak earnings results. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- Regardless of the drop in revenue, the company managed to outperform against the industry average of 3.8%. Since the same quarter one year prior, revenues slightly dropped by 2.6%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
- The gross profit margin for DELPHI AUTOMOTIVE PLC is rather low; currently it is at 22.31%. Regardless of DLPH's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, DLPH's net profit margin of 5.50% compares favorably to the industry average.
- You can view the full analysis from the report here: DLPH Ratings Report