Delphi Automotive: The Less Heralded Autonomous Driving Play

At this point, it seems inevitable that driverless cars are the future of the automotive industry. Investors who want to be a part of the transformative and potentially extremely profitable autonomous vehicle era have been piling into popular driverless car stocks like Tesla Motors Inc (NASDAQ: TSLA), Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL), Baidu Inc (ADR) (NASDAQ: BIDU), NVIDIA Corporation (NASDAQ: NVDA) and Mobileye NV (NYSE: MBLY).

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Stop Overlooking Delphi

However, according to Baird, often-overlooked Delphi Automotive PLC (NYSE: DLPH) is the top driverless car play for investors. While the majority of the companies associated with driverless car technology are Silicon Valley tech companies, Delphi is positioned to be one of the leaders of the new era of the Michigan automotive legacy.

Perhaps its location is one of the reasons Delphi is often overlooked by investors. But Baird sees Delphi as a hidden gem with strong earnings and revenue growth and solid margins.

“We also look for the valuation to move higher as investors increasingly become comfortable that Delphi has the portfolio of technologies to supply next-generation vehicles across fuel efficiency, safety and autonomous driving, infotainment and advanced electrical networks,” Baird said in a new note.

In addition to naming Delphi a top stock idea, the firm maintains an Overweight rating and a $95 price target for the stock.

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