Aptiv (APTV) may benefit from rising orders from Chinese carmakers and customers outside the auto industry, while cost recoveries and stronger H2 margins could help it meet its full-year target, RBC Capital Markets said Tuesday in a report.

Aptiv's Q1 adjusted EBITDA beat expectations, driven by strength in its former electrical distribution systems unit, now spun off as Versigent (VGNT), the report said. Weakness in the intelligent systems unit partly offset the beat, with pressure from Ford (F) production disruptions and slower-than-expected progress on a major European automaker's program, RBC said.

Management maintained its full-year adjusted EBITDA guidance of $2.4 billion, though the Q2 outlook implies Aptiv will need better margins later in the year to reach that target, RBC said.

Aptiv's expansion outside autos looks positive, supported by new business wins in naval, space and energy-storage markets, though early investment may weigh on margins until the business grows, the report said.

RBC maintained its outperform rating on Aptiv stock and its $81 price target. The company should be able to manage higher commodity expenses given its strong track record of recovering most of those costs from automaker customers, the report said.

Price: 56.81, Change: +1.98, Percent Change: +3.61