Morningstar Rating

Stock Research and Analysis

by Richard Hilgert

Bulls Say

Owing to product segments with better-than-industry-average growth prospects like safety, electrical architecture, electronics, and engine management, we expect Delphi's revenue to grow in excess of the percentage change in global demand for new vehicles.
The ability to continuously innovate new process and product technologies should enable Delphi to generate excess returns over its cost of capital.
A global manufacturing footprint enables participation in global vehicle platforms and provides penetration in developing markets. Read more 

Bears Say

The cyclical, capital-intensive nature of the automotive industry can cause companies to experience substantial swings in profitability.
Established new-vehicle markets are hypercompetitive, forcing automakers to slash costs wherever possible. Standard industry supply agreements can include annual contractual price declines of up to 5%, seriously eroding vendors' margins.
Raw material costs including steel, copper, and aluminum are volatile, adding a degree of uncertainty to margin. Read more 

Management

While Delphi's operations have changed substantially since 2005, we would have preferred to see a completely new management team installed just before the company's emergence from bankruptcy. Seven out of nine executive officers were members of the   Read more 

Profile

Delphi is one of the largest auto-parts suppliers in the world. The company is organized by product group, including electrical and electrical architecture, powertrain,   Read more 

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