Aptiv's (APTV) spinoff of its Versigent (VGNT) electrical distribution systems business may benefit shareholders, though geopolitical pressures might delay any improvement in the stock's valuation, RBC Capital Markets said Monday in a report.

Aptiv's Engineered Components division, which generated $6.7 billion in 2025 revenue, has industry-leading margins and strong positions in cable management and interconnects, RBC said.

The Intelligent Systems division needs to accelerate software growth to support a premium valuation, with execution risk tied to competition and required research and development spending, the reprot said.

RBC said its projections of 2026 earnings before interest and taxes of $1.18 billion for Engineered Components and $710 million for Intelligent Systems are slightly below consensus, reflecting lower expected volumes in Europe and China volumes due to the Middle East conflict.

RBC lowered the price target on Aptiv stock to $81 from $104 and maintained its outperform rating.

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