NEW YORK (TheStreet) -- Shares of Koninklijke Philips NV (PHG) are up 2.55% to $30.91 in pre-market trade after the healthcare, consumer lifestyle, and lighting firm said it would split into two new companies and prepare its lighting business for a stand-alone future, marking a new phase in the overhaul of the Dutch conglomerate, according to MarketWatch.
Philips said its health care and consumer-lifestyle operations would be merged into a new company, called HealthTech, and that its lighting business would be moved into a separate legal structure, which could result in a spin off.
The companies, which will continue to carry the Philips brand, will be better positioned to deliver long-term growth, Philips said in a statement before an analyst conference.
TheStreet Ratings team rates KONINKLIJKE PHILIPS NV as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:
"We rate KONINKLIJKE PHILIPS NV (PHG) a BUY. This is driven by several positive factors, 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 good cash flow from operations, largely solid financial position with reasonable debt levels by most measures, expanding profit margins and notable return on equity. We feel these strengths outweigh the fact that the company has had sub par growth in net income."