Barclays Goes Overweight Delphi, Sees Significant Upside For 'Blue Chip'

• The share price of Delphi Automotive PLC (NYSE: DLPH) have appreciated 10.15 percent over the past year, from a low of $66.59 on January 16, 2015.
• Barclays’ Brian A. Johnson has reinitiated coverage of the company with an Overweight rating and price target of $105.
• Although the stock outperformed the S&P in 2015, Johnson believes that there are several opportunities that could keep the stock up during 2016.

Analyst Brian Johnson believes that although the stock is currently trading at a premium to peers, this premium is justified and that it has “become a consensus favorite for both LT holders and even for some hedge funds.”

Johnson mentioned that the Delphi Automotive’s EPS growth opportunity was “alive and well,” with the three-year EPS CAGR at 12 percent, as compared to the 11 percent group average.

Johnson also stated that investors are likely to be underestimating the company’s top line opportunity.

Expressing optimism regarding the company’s accretive M&A strategy to supplement EPS growth, Johnson stated that this strategy was “especially relevant given DLPH's elevated multiple and the low-growth environment for global auto production.”

In addition, “Connected Car” trends are expected to continue to rise in 2016. Delphi Automotive is likely to witness upside to its stock valuation “as investors further appreciate their leading technology capabilities both in ADAS/autonomous driving and infotainment,” Johnson added.