Morgan Stanley's Adam Jonas told clients in a note on Friday that he based his call on strong first-quarter financial results and the firm's position in the connected-car space.
Visteon shares traded recently up 4.6% to $104.70
He argues that Visteon is the only pure-play electronics supplier that Morgan Stanley covers and that it has structural resiliency as the industry switches to electric from traditional vehicles.
Recent connected car acquisitions have drawn focus to Visteon (VC - Get Report) , a former unit of Ford (F - Get Report) that has divested units in recent years to focus on electronics and instruments for car cockpits and to develop smart car technology.
The stock has gotten a bump since Mobileye (MBLY) announced it's $15.3 billion sale to Intel (INTC - Get Report) on March 13, although Samsung Electronics' $8 billion purchase of infotainment, telematics and other connected car systems developer Harman International may be a more accurate comparison.
Spun off by Ford in 2000, Visteon tangled with Alden Capital Management about half a decade ago. The activist won board seats, and in recent years Visteon has focused its business through divestitures and investment in smart car technology. Barclays analyst Brian Johnson described Visteon, which has a roughly $3.3 billion market cap, as "an interesting consolidation candidate given it is an easily digestible connected car target," in a note following the Mobileye sale.
Chris Nolter contributed to this report.