NEW YORK (TheStreet) -- Shares of Visteon Corp (VC) are higher by 3.69% to $106.86 after the company said it's planning to split into two companies, one focused on electronics and another on climate controls, Bloomberg reports.
The auto parts company concluded that the two divisions don't benefit by operating under the same corporate umbrella, Bloomberg added.
Broken up, Gabelli & Co. (GAB) estimated that Visteon's divisions could be worth 25% more than the whole company's $4.5 billion market value.
Separately, TheStreet Ratings team rates VISTEON CORP as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:
"We rate VISTEON CORP (VC) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, reasonable valuation levels, solid stock price performance and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- VC's revenue growth has slightly outpaced the industry average of 8.9%. Since the same quarter one year prior, revenues rose by 10.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Compared to its closing price of one year ago, VC's share price has jumped by 41.63%, exceeding the performance of the broader market during that same time frame. Turning to the future, naturally, any stock can fall in a major bear market. However, in almost any other environment, the stock should continue to move higher despite the fact that it has already enjoyed nice gains in the past year.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Auto Components industry and the overall market, VISTEON CORP's return on equity significantly exceeds that of both the industry average and the S&P 500.
- VC's debt-to-equity ratio of 0.71 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.26 is sturdy.
- You can view the full analysis from the report here: VC Ratings Report
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