Delphi's Spinoff Upside Already Priced In?

The spinoff is expected to be complete in the first quarter of 2018.

Amid this analysis, UBS downgraded shares of the company from Buy to Neutral, with a price target of $102.

Analyst Colin Langan said he believes with the 28 percent run-up in the company's stock since the announcement, which increased the year-to-date gains to 49 percent, the breakup upside is fully priced-in. The analyst's detailed sum-of-the-parts analysis showed that the company's shares trade in line or above peers in all sub-segments.

Langan also indicated that spin-related separation costs of $160 million was higher than his prior estimate of $80 million. Therefore, the analyst said his 2018 EBITDA estimate goes down modestly.

Meanwhile, UBS updated its earnings per share and EBITDA forecasts for Aptive, which is the RemainCo and Delphi Tech, which is the Powertrain business. The firm also updated its product level growth forecast for each business.

To reflect higher separation costs, partially offset by a lower tax assumption, the firm lowered its earnings per share estimates for 2018 and 2019. The firm's downgraded 2018 earnings per share estimate is at $7.30, 1 percent above the consensus estimate.

UBS drew from history to show that premium multiples are difficult to sustain, with Delphi's EBITDA multiple falling from over ten times at the end of 2016 to just over seven times in mid-2016 before recovering. With the company's shares currently trading at ten times, the firm does not see a favorable risk-reward.

Instead, the firm sees a better risk-reward at top pick Adient PLC ADNT as well as Tenneco Inc TEN and BorgWarner Inc. BWA.