Can Aptiv PLC Stock Bounce Back From This Week's Lows?

APTV is slated to release earnings on Feb. 3

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On Jan. 18, Aptiv PLC (NYSE:APTV)  announced that Sophia Velastegui will be joining the auto technology company as its Chief Product Officer. Velastegui is bringing with her more than 20 years of experience at Microsoft, Google, Apple, and Applied Materials. This comes just ahead of the company's fourth-quarter earnings report, due out before the open on Thursday, Feb. 3. Wall Street analysts have the company’s earnings per share (EPS) coming in at $0.54 for its upcoming earnings report.

The equity is brushing off a bear note from Berenberg today, last seen up 2.1% to trade at $138.74. The analyst cut its price target to $193 from $199, joining Wells Fargo, which slashed its price target to $123 from $126 yesterday. Regardless, sentiment surrounding the stock is still relatively high, as it's 12-month consensus price target of $182.04 is a 31% premium to current levels, and of the 12 in coverage, nine analysts consider APTV to be a "buy" or better. 

Earlier this week, APTV fell back within striking distance of its January 2021 annual low of $127.21, but has managed to find support at a familiar floor near the $135 level. Now the security is contending with the $140 area, where APTV staged a sharp bounce in late-September. Year-to-date, the stock is down 15.6%.

Meanwhile, short-term options traders have been incredibly put-biased. This is per the security's Schaeffer's put/call open interest ratio (SOIR) of 1.65, which stands higher than 85% of readings from the past year. 

Nonetheless, Aptiv stock's valuation is still on the pricier end with APTV trading at a price-earnings ratio of 47.41 and a price-sales ratio of 2.95. Aptiv has also struggled to generate consistent top- and bottom- line growth. Although its trailing 12-month revenues have increased 20%, APTV previously reported two consecutive years of revenue declines, dropping a total of 9.5% between fiscal 2018 and fiscal 2020. In addition, Aptiv's trailing 12-month net income has decreased 55% since fiscal 2020 and is down 26% since fiscal 2018. However, APTV is estimated to grow earnings in 2022, making Aptiv stock a potential recovery option for the coming year.


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