Delphi Represents One Of Goldman's Best Secular Growth Stories

Goldman Sachs analyst Patrick Archambault believes Delphi Automotive PLC DLPH represents "one of the best secular growth stories" in the automobile sector space, which has witnessed a steady growth over the last seven years. However, the brokerage removed the stock from its Conviction List, citing the stock dropping 22 percent since January 3 when it was added to the list, especially compared to the S&P 500 index's 2.7 percent growth.

However, the investment firm maintains its Buy rating, while slashing its six-month price target to $94 from $103, which offers upside potentials of close to 40 percent from Friday's closing price.

Related Link: Goldman On Auto-Related Stocks: Stay Constructive On Key Growth Names

The brokerage also continues to believe in Delphi Automotive's "secular content growth opportunity and further believe(s) that the unsynchronized global auto cycle provides a back-drop where regionally diversified auto suppliers like Delphi can drive solid top line and earnings growth."

The investment firm said, "We believe the choppier start of the year for monthly US auto sales pace combined with investor positioning drove the underperformance in shares relative to both the S&P 500 and our overall Auto coverage."

Goldman Sachs also continues to think the risk/reward as favorable, as the issue is "now trading more in line with its auto peers despite a superior growth profile." The brokerage also sees acceleration in organic revenue growth apart from solid second-quarter guidance following the changes in supply chain and OEM production due to the Japanese earthquake.

At time of writing, Delphi was down 0.72 percent at $66.63.